In today’s post-Covid world of strained supply chains, food security is further threatened by a 25% world supply shortage caused by sanctions against Russia and Belarus. The US imports 95% of its Potash requirements from Canada and it is critical that American potash production be brought on-line to ensure long-term National Food Security. The Sage Plains Project could be the largest potash deposit closest to production within the continental US to improve regional and national supply chain resilience and reduce delivered cost to market. Pricing from Canada to various US market regions include high freight and storage costs between $150-225/ton.
There are potash deposits in the US that have historically provided some domestic supply, mostly located in New Mexico, Michigan and Utah. According to the most recent figures available from the USGS⁵, for 2020, domestic production has remained stable over the past several years even as price (and profitability) has risen. Existing producers are limited by complex geology, and production constraints and new sources must be developed.
Establishing new mines in known potash-rich areas is a good place to start. The USGS estimates there are about 7 billion tons of potash that is potentially accessible in the US, with about 2 billion tons located in the Paradox Basin that covers portions of southeastern Utah and southwestern Colorado.
PARADOX BASIN CONTAINS MORE THAN 25% OF US POTASH, YET ONLY PRODUCES 3.5% OF US POTASH DEMAND
Potash prices have risen dramatically due to the sanctions against Russia/Belarus, but have adjusted lower due to increased inventories. The Potash market is expected to register fluctuating growth trends in the long term, while inflation and supply chain concerns are expected to continue in 2023.* One area that needs to be watched closely in the U.S. in the early part of 2023 is fertilizer logistics. The all-important Mississippi River continues to operate at extremely low levels because of drought lowering river levels. Reports from the river say barges are operating somewhat lighter to negotiate the shallower river. This could affect both nutrient supply and price.**
*2023 Potash Market Outlook Report **2023 Potash Outlook Sees More Supply, Lower Prices
Planting economics for growers must consider many factors: previous and future commodity prices, fertilizer costs, soil analysis etc. Depending on these inputs the decision to skip fertilizer for a season could be a reality. The major foreign producers only supply a “one size fits all” product, a standard potassium content blend. Having a regional US based producer with the flexibility to supply varying blends of potassium could be an important factor in managing seasonal planting unit costs when potash prices are up. Similarly, varying climate zones and soil conditions may benefit from lower potassium content thereby reducing unnecessary fertilizer run-off.
Maintaining crop production and boosting yields requires 3 essential nutrients: NPK (Nitrogen, Phosphate, Potassium). Potassium(K) is key in plant nutritional composition. Both humans and animals require high levels of K in their diet to function properly. Humans get their K requirements by consuming fruits, vegetables, grains and animal protein. The animals that we rely on for food also get their K requirements from feed crops (alfalfa hay, corn stover, and small grain cereals). Most of the potassium found in soils, is tied up (and insoluble) as feldspar and mica and unavailable to the plant, the minimal available fraction is found in soil solution.
Key roles of potassium in plants:
President, Sage Potash (USA)
J. Patricio Varas, P. Geo. (B.C.).
Director, P. Geo
Director, Sage Potash (USA)
Engineering & Geoscience Partner
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