Latin America’s value-added fertilizer market and ag innovation

Latin America’s value-added fertilizer market and ag innovation

In the ever-evolving landscape of agricultural inputs, a quiet revolution has been taking place across Latin America. Value-added fertilizers (VAFs), long operating in the shadows of traditional fertilizers, have emerged as a powerful force in the region’s agricultural transformation. Vatren Jurin of DunhamTrimmer explains more.

Plantation crops such as coffee are part of the success story for value-added fertilizers in Latin America.

PHOTO: TESSENDERLO

A transformed market

The Latin American agricultural sector has been quietly pioneering the adoption of value-added fertilizers (VAFs) – also known as specialty fertilizers – particularly in its vast row crop operations and high-value specialty crop segments. This market, hidden in plain sight for years, has now reached a critical inflection point, with global valuations touching $19.3 billion in 2022 and projected to surge beyond $30 billion by 2030, with a robust and compelling 6.8% per annum growth trajectory.

What makes this transformation particularly noteworthy is its natural evolution – a response to the region’s unique agricultural challenges and opportunities rather than a top-down industry initiative.

Table 1: Area of agricultural land in Latin America treated with value-added (VAFs)

Fig. 1: Area of agricultural land in Latin America treated with value-added (VAFs)

To understand the scale of this transformation, it’s important to grasp the concept of ‘treated hectares’ – as this key metric measures the cumulative area treated with VAFs throughout a growing season, not just the physical land area. For instance, if a single hectare receives three applications of a VAF during one season, this counts as three treated hectares, therefore reflecting the intensity of fertilizer usage rather than just geographical coverage. This distinction becomes crucial when analysing the true scope and impact of VAF adoption across different crop categories.

Latin America’s VAF treated hectares have grown to an impressive 130 million hectares, with row crops representing the lion’s share of treated areas (Table 1, Figure 1). It’s the region’s approach to VAF application that sets it apart from its global counterparts, particularly when it comes to the treatment of row crops. Unlike the northern hemisphere, LATAM farmers employ more frequent in-season management practices, enabling multiple foliar applications throughout the growing season, thereby multiplying the treated hectare count for each physical hectare under cultivation.

The VAF innovation story: beyond traditional nutrition

What sets VAFs apart from conventional fertilizers is their sophisticated three-pillar approach: being comprised of foundational nutrients, performance enhancing components, and functional physiological elements (Table 2, Figure 2). This isn’t merely a marketing distinction; instead, it represents a fundamental shift in how growers approach crop nutrition and performance. It’s also worth noting that the evolution of VAFs has been driven by advances in the biostimulant sector, leading to products that deliver more than the sum of their parts.

The flexibility in VAF formulations has proven particularly valuable in the Latin American context. Manufacturers can, in fact, drastically adjust VAF compositions, ranging from 25-95% for foundational components, 0.5-30% for performance enhancers, and 3-25% for functional biostimulant components (Table 2). This adaptability allows for the precise tailoring of VAFs for specific crops and growing conditions, a crucial factor given the region’s diverse agricultural landscape. In turn, it is this ability to fine-tune formulations that has enabled VAF manufacturers to address specific local challenges while maintaining competitive pricing and performance.

The Latin American advantage: a closer look at row crops

The region’s unique position in VAF adoption is particularly evident in its soybean sector. Row crops account for 83 million treated hectares, with soybean cultivation leading the way. Soybean management practices, which include multiple crop protection applications throughout the growing season, have created an ideal environment for VAF integration. This high adoption rate in row crops sets Latin America apart from other global markets, where VAF use has traditionally been more concentrated in specialty fruit and vegetable crops.

The success in row crops can be attributed to Latin America’s distinctive agricultural practices, particularly in countries like Brazil and Argentina. These nations have developed sophisticated crop management systems that allow for multiple in-season applications, maximizing the benefits of VAF technology. Overall, the region’s approach to row crop management has effectively demonstrated that VAFs can be successfully integrated into large-scale commodity crop production, challenging the conventional wisdom that specialty fertilizers are primarily for high-value specialty crops.

Plantation crops: a strategic growth sector

Plantation crops have emerged as another significant VAF success story in the region. Coffee, pineapple, tropical fruit trees, and banana plantations, crucial to Latin America’s export market, have become major consumers of VAFs. Countries like Brazil, Colombia, Ecuador and various Central American nations have seen extensive adoption across their plantation sectors, driven by the crops’ high economic value and extended growing seasons. The longterm nature of these crops has encouraged growers to invest in advanced nutrition strategies, making them ideal candidates for VAF applications.

Table 2: Value-added fertilizers are sophisticated products that combine three components in different percentages

Fig. 2: For value-added fertilizers, different permutations of enhancing components (functional, perfomance) are possible

Fig. 3: The rise of value-added fertilizers (VAFs) is part of a fundamental shift from volume to value in the crop nutrient market

The specialty crop revolution: intensive management drives innovation

Perhaps the most dynamic segment of Latin America’s VAF market lies in its specialty crop sector. Specialty crops, while comprising a smaller portion of treated hectares, represent a more intensive and sophisticated segment of VAF application and technology. The treated hectare figures in this sector tell a compelling story (Table 1, Figure 1):

• 11 million treated hectares of tree fruit and nuts
• 6 million treated hectares of vegetables and annual fruits
• 3 million treated hectares of vine and berry crops
• 6 million treated hectares of tubers.

These figures are particularly revealing, as they reflect multiple applications throughout the growing season, resulting in treated hectare counts that far exceed the actual planted area.

Chile and Peru stand out as leaders in this segment, particularly in their fruit export sectors. High-value crops such as table grapes, berries, stone fruits and citrus receive multiple VAF applications, often through both foliar and irrigation systems. The intensive management of these crops, driven by export market demands, has created a sophisticated VAF usage pattern that can see up to six foliar applications per season during favourable market conditions. This high-intensity application model has become a proving ground for new VAF technologies and application strategies.

Environmental sustainability and market growth

The rise of VAFs in Latin America isn’t just about productivity – it’s increasingly aligned with environmental sustainability goals. These products enhance nutrient uptake efficiency, reducing leaching and runoff, while their biostimulant components improve plants’ resilience to environmental stresses like drought and soil salinity – crucial advantages in an era of climate change. The environmental benefits of VAFs have become increasingly important as the region faces growing pressure to adopt more sustainable agricultural practices. They also represent a long-term shift from volume to value in the fertilizer market (Figure 3).

The combination of enhanced efficiency and environmental benefits has positioned VAFs as a key component of Latin America’s agricultural future. As the global VAF market is projected to undergo continued strong growth through to 2030, Latin America’s position as a key adopter and innovator in this space becomes increasingly significant. Indeed, the region’s unique combination of large-scale row crop operations, extensive plantation crops, and high-value specialty crop production continues to provide an ideal testing ground for VAF technology and application strategies.

Looking ahead: future growth and innovation

The evolution of the VAF market in Latin America, from a hidden segment to a mainstream force in agricultural inputs, reflects broader changes in world agriculture. As the global ag industry grapples with the challenges of sustainability, climate resilience, and productivity, the region’s experience with VAFs offers valuable lessons for other markets. The successful integration of VAFs across diverse crop types and production systems demonstrates the versatility and potential of these products.

The success of VAFs in Latin America also demonstrates that innovation in agricultural inputs doesn’t always announce itself with fanfare. Sometimes, the most significant transformations happen quietly, hidden in plain sight, until their impact becomes impossible to ignore.

As we look toward the future of global agriculture, Latin America’s VAF market stands as a testament to the power of gradual, market-driven innovation in shaping sustainable agricultural practices. The region’s journey with VAFs provides a roadmap for other markets also seeking to balance productivity, sustainability, and profitability in modern agriculture.

About the author

Vatren Jurin is Chief Technology Officer at DunhamTrimmer.