Over recent years there has been a raft of different 'peak' theories propounded - usually by environmental groups - all of which predict the end of the world as we know it for agriculture, because global supplies of a specific critical input are about to run out. Included in the list has been peak land, peak water, peak phosphorus, peak potassium, and peak oil. It often seems the predicted 'peaks' are projected on questionable statistics, and ignore some soem basic economics.
A number of these projected peaks have stubbornly refused to materialize - especially peak oil, and peak land. In fact, despite all projections, each time grain prices look like experiencing a sustained increase, more land is sown to crops and down go grain prices once again.
On of the crop inputs often said to be at peak level of utilisation is potash - the raw precursor of potassium which is an essential element for plant growth. In fact major mining companies such as BHP Biliton have announced major investments aimed at taking advantage of diminishing supplies and the potential for high prices. However, a recent report by Agribusiness bank Rabobank seems to be suggesting that peak potash might go the way of other peak theories, trashed by the cold, hard and ruthless rules of economics. High potash prices have led investors to activate plans to open up new mines, and given the 'lumpy' nature of mining investments, this creates the very real potential of an over-supplied market, and crashing potash prices.
Exactly the same thing happened to the peak phosphorus theory. Just when predictions of the world running out of phosphorus (and here) were gaining a lot of media attention, major mining companies activated investment plans and as a result phosphorus reserves were reappraised, supplies grew quickly, and phosphate prices again dropped. This was exactly as predicted by a number of knowledgeable analysts (see here, and here).
The 'peak' concept is very easy to sell to the media, and stories of impending doom are certainly very popular. The reality, however, is more often the old adage that "the best fix for high commodity prices is high commodity prices."