Meat is the new coal — and what that means for potash and...

Meat is the new coal — and what that means for potash and phosphate

Posted on June 9, 2014 by Robin Bromby

Last week, according to the Friday June 6 Commodities Weekly bulletin from Deutsche Bank, all commodity sectors posted negative returns. With one exception: livestock.
Then, on Saturday, The Financial Times printed this sentence” “Meat is the new coal”. They were reporting how China is buying anything connected with pork production (including, last year, the biggest U.S. pork producer Smithfield Foods for $7 billion) and, thanks also to China, Australian beef exports quintupled in 2013. In other words, food supply to China is going to figure as critically as mineral exports.
China’s enormous appetite for food is the subject of a special section in the World Bank’s latest China update, which showed that between 1980 and 2009 fat intake in China nearly tripled from 34 grams per person to 96g. And this was due to greater consumption of livestock products.
But what the World Bank report does not do is examine the implications of this for fertilizer, and potash and phosphate in particular. The report does mention in passing that “production of livestock-based food requires far greater resources”, but, in essence, what is required is that more grain is produced to feed the animals or better grass is grown. That requires fertilizer, and as the years go on even greater amounts of it.​

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