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Phosphorus is one

of the nutrients that's crucial for life. It's part of the makeup of

DNA and of cell membranes, so all life needs

access to phosphorus. Phosphorus is also present

in agricultural soils. But there are

various reasons why farmers choose to

add more than what's already present in the soils. Some soils are very deficient

in the amount of phosphorus that's there. In all cases where grain

is harvested and removed, they include some phosphorous

that then needs to be replaced. And in other cases where the

phosphorous isn't particularly deficient, it's still possible

to increase crop yields by applying more. So farmers typically

often choose to provide phosphorus in

fertilizers to their crops. This photo shows

some corn plants that are phosphorus-deficient. You can see from the

purpley-brown color, which is characteristic of

phosphorus deficiency, that these plants won't yield

very high yields of corn compared to if they had plenty

of phosphorus available. These days, phosphorus

is mainly obtained from mining of rock phosphate. And each year,

around the world, we mine around 170 million

tons of rock phosphate. It's estimated that there are

around $65 billion tons of rock phosphate out there

somewhere in the world. But only a minority of that,

around 16 billion tons, is judged to be economically

viable to actually mine. The rest of it's too

inaccessible or too deep or in a form that's

not easily mined. And around 80% of the relatively

accessible phosphate rock is in two countries-- Western

Sahara and Morocco, in Africa. One of the characteristics

of phosphorus that makes it

particularly important is that, unlike

nitrogen, it's not possible to

chemically synthesize phosphate fertilizer. It has to be obtained from a

source like rock phosphate. So that raises the question,

will we run out of phosphorus? Various people have talked about

the concept of peak phosphorus, which is a bit like

the idea of peak oil that gets talked

about quite a bit. So peak phosphorus is the

time when global phosphorus production will reach

its maximum rate and easily, cheaply

accessible phosphorus will have been

exhausted, after which we expect that the availability

and the ability to access and mine phosphorus will

fall away quite sharply. This diagram shows one possible

way that that could play out. You can see the

blue shapes there show the record of actual mining

and extraction of phosphorus. And the red line is a sort

of a projection or prediction about what might

happen in future. In this case, it will come to

a peak a couple of decades, and then start to fall away. Now, one of the

big uncertainties is about when that

peak will occur. And this is very

difficult to judge. You need to consider

a lot of information to be able to judge it. We need to know about what

the actual level of reserves are that are out there, what's

the cost of extracting them and how that might

change over time, whether there could

be improvements in the technology of extracting

and mining rock phosphate, possible reductions in

waste of phosphorus-- a lot of phosphorus currently

is wasted in the system-- improvements in the technology

for application of phosphorus fertilizer, possibly changes in

the demand for food in future, and the levels of

recycling of phosphorus that might occur in the future. So all of those things

are relevant to trying to predict when peak

phosphorus might occur. Timing estimates,

understandably, vary quite widely,

as different people make different judgments

about these things. And so you can find out

there are predictions that range from about 20

years to well over 100 years. Cordell and some

colleagues in 2009 published a paper,

when they predicted that peak phosphorus

would occur in about 2030, and that we would have complete

exhaustion of phosphorus supply in between

50 and 100 years. At the other end

of the spectrum, or at least in quite

a degree of contrast, the International Fertilizer

Development Center predicted that peak

phosphorus will occur after the

end of this century and that we have

enough phosphorus to last for several years. So who's right? How should we look at these

two contrasting predictions? What are some of the arguments

for a relatively early peak in the mining of phosphorus? Well, one is that we know that

easily accessible phosphorus is being depleted. It's getting steadily

more difficult. And we also know that

food demand is growing and will continue to grow

as the population grows around the world. So both of those

things would tend to make you expect a relatively

early time for peak phosphorus. On the other hand,

there are some arguments for a relatively

late peak phosphorus. One is that as phosphorus

becomes scarcer and scarcer, we know from supply and demand

that its price will increase. And high prices

for any commodity have some pretty important

implications and consequences. So in the case of

phosphorus, we'd expect that high prices

would encourage people to go out and explore

for additional reserves of phosphorus. We also expect that

high prices would mean that relatively expensive

methods of extracting phosphorus would start

to become economical. Methods that currently

aren't viable would become viable if

the price got high enough. And the third consequence

of high prices would be that it would

encourage users of phosphorus and processors of phosphorus

to innovate in various ways to try and conserve it

and make it last longer. And that's important, and

there opportunities here, because most applied

phosphorus is actually wasted. Only a minority of it is

actually taken up by crops. Another factor here

is that there's quite a degree of scope for

recycling of used phosphorus-- capturing it and reusing

it-- whereas at the moment, almost none of that occurs. And as a result of
extra exploration, and perhaps new

technology, we're quite likely to be able to find

new deposits of phosphorus. Another factor that

might play on our minds here is that the

early predictions about the timing of

peak oil turned out to be way too pessimistic. The amount of oil that's

available, we now believe, is much higher than we believed

in the early years, when people were first predicting

when peak oil would occur. So it's probably the case

that something similar will occur for peak

phosphorus as well. We do have some

experience of trying to cope with relatively

scarce or perceived scarcity of phosphorus. So at about the time of the food

crisis that we talked about, 2006 to 2008, there

was also a peak in the price of

fertilizer, and especially of phosphorus fertilizer. You can see that

from the graph here. So what are some of the

consequences of high phosphorus prices that we would expect

to occur after we have reached this point of peak phosphorus? Well, one of the

factors, obviously, is that farmers'

costs will increase. And that means that the

supply curve for food will go up, because

the cost of production, the marginal cost of

food supply, will go up. OK. Now, this graph

shows various things. It shows higher prices

will be one of the results. And that will lead to lower

equilibrium demand for food. So the marginal

cost has gone up. We end up with a higher

equilibrium price. And we end up with a lower

equilibrium demand for food. And there are a

couple of reasons for that lower

equilibrium demand. One is that people

choose to buy less food. They trade off food with other

things that they could buy. And because of the higher

cost, they choose to buy less. And another reason is

that they can afford less. So relatively,

particularly people in poor countries

on low incomes can't afford to purchase so much food. And so the high price means

that just there's less purchase. Now, one of the

factors about food is that it's

considered a necessity. We need to eat. And so compared to some

other things that we buy, the demand curve for

food is much steeper. The actual quantity

demanded doesn't decrease as rapidly as price increases

compared to other goods. So what that means is that

the consequences of increased marginal cost will mainly

be felt by consumers. And the high price will mean

that farmers get an increased revenue, which partially offsets

the higher costs and lower quantity that they will face. So it's quite a complex story. The marginal cost

of food goes up because of the higher

cost of phosphorus. That increases the price

that consumers face. They reduce their

demand-- the amount that they'll actually

choose to buy. That has a negative

consequence for farmers. But the higher price has

a positive consequence with farmers. So there's a bit of a win and

lose situation for agriculture. Now, I talked about the

slope of the demand curve. And to finish off

today, I just want to talk about the concept of

the elasticity of demand, which is a concept or a term

that economists use to refer to this slope of

the demand and supply curves. So on the left

hand in this slide, you can see a demand curve

that is highly inelastic. The quantity doesn't change

much as the price changes, whereas on the

right hand side, you can see a demand curve

that is highly elastic. As the price changes

a little bit, the quantity demanded

changes a lot. So the graph on

the left hand side would be relevant mainly

to necessities like food, whereas the graph

on the right would be mainly relevant to

luxury goods, goods that we could do

without and would choose to do without if the

price went up too much. The same sort of concept can be

applied supply curves as well. So on the left, we've

got a graph which has an inelastic supply curve,

and on the right hand side, a graph with an

elastic supply curve. An inelastic supply curve

means that as the price changes, then we don't get much

change in the amount of supply, whereas, again, if the price

changes a little bit when we have an elastic

demand curve, we get quite a big

change in supply. And the elasticity

of supply and demand combine to determine

how things will change-- what happen to

price and quantity as something like

marginal cost changes due to an event like

peak phosphorus. To summarize, then, one of the

key points about phosphorus is that there is no

substitute for phosphorus, and it can't be

artificially produced. Peak phosphorus is a concept

that's widely discussed. And when it eventually

occurs, it'll have quite significant

consequences. But I think overall, for

reasons that I've put, the level of peak phosphorus

probably won't occur that soon. It's likely to be later

rather than really soon. But when higher

phosphorus prices do occur due to peak

phosphorus, this will lead to higher

cost to farmers, but also, to some great

at least, higher revenues and higher cost

to consumers, who are lucky to suffer

in the medium term, once markets equilibrate. They're likely to suffer

more than the farmers do.

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