In
important ways, the circumstances surrounding
Thomas’s entry into the fertilizer business
were not propitious. First, Thomas began business
near the end of a half-century-long relocation
of the fertilizer industry’s center. Though
fertilizer use continued to increase in the Mid-Atlantic
states and elsewhere during the period from 1870
to 1920, the manufacture of fertilizer began to
shift to the Southern states in the late nineteenth
century. By 1902, Charleston had replaced Baltimore
as the fertilizer capital of the country. The
Mid-Atlantic states’ share of total fertilizer
use decreased from 34% in 1880 to 14% in 1920.
By contrast, in 1920 the South-Atlantic states
used about 50% of all fertilizers consumed in
the U.S. Thus, Hagerstown could no longer enjoy
proximity to the major centers of fertilizer-material
production, and, while previously situated between
the two highest-fertilizer-use regions of the
country, it now found itself on the northern edge
of a region that now dwarfed all others.
Second, Thomas’s decision to continue in
the practice (apparently favored by Hagerstown
companies) of making fertilizer primarily from
bone and organic materials came at the start of
a rapid increase in the demand for mixed fertilizers,
but also at the beginning of a precipitous decline
in the use of bone and bone products as a source
of phosphorous in fertilizers. With the growing
use of potash and phosphate rock, consumption
of mixed fertilizers grew from 46% of the total
in 1880 to around 70% in 1920. During the period
from 1890 to 1910, when Thomas was focusing on
his presumably unmixed “dissolved bone”
fertilizers, mixed fertilizers were capturing
market share.
Furthermore, the period from 1880 to 1920 is
also characterized by the decreasing use of organic
materials in general. Though organic materials
provided about 91% of the total nitrogen in 1900,
by 1917 the total nitrogen contribution from organics
had dropped to 46.5%. With regard to phosphates,
bone meal, dissolved bones and boneblack, and
phosphoro-guano use peaked in 1890, but their
use dropped to a negligible amount by 1910 as
the use of superphosphates from phosphate rock
increased dramatically..
Third, even as Thomas had begun his business
trading fertilizer for livestock from relatively
distant places, the fertilizer industry was increasingly
turning to local distribution. Though mid-nineteenth-century
fertilizer plants typically were situated in East
Coast harbor cities, twentieth-century plants
were dispersed to be closer to areas of consumption.
Finally, even though the name “Thomas’
Dissolved Bone” suggests that Thomas produced
his own superphosphates initially, the use of
bone in the production of superphosphates was
on its way out as described above. For all practical
purposes, then, Thomas had set his business on
the track of the second, smaller type of fertilizer
company, which only mixed fertilizer and did not
produce superphosphates. For the next 90 years,
even when Central Chemical had affiliates across
the nation, it would remain in this “smaller”
category – relying on large suppliers for
its materials. For reasons noted above, this was
not a problem at the turn of the century vis-à-vis
the larger companies. Starting in the 1890s, however,
many agricultural societies began to advocate
home mixing of fertilizer materials by farmers.
Throughout the first half of the twentieth century,
the fertilizer industry fought this effort successfully
by insisting on the value of industrial mixing
processes and the farmer’s comparative disadvantages
in mixing.
Though in its early years, Central Chemical advertised
itself as “Exporters – Manufacturers
– Importers,” by the 1970s it had
become little more than a middle-man between larger
suppliers and farmers. It did not import its own
materials, but purchased granulated materials
from suppliers. There is no evidence that Central
Chemical was exporting products out of the country
anymore. And its manufacturing capacity consisted
of mixing pre-processed granulated materials in
various proportions. At this point, its consulting
capacity became equally important to its factory
processes.
Though Central Chemical and its subsidiaries
were taking in a combined $25 million in sales
by the late 1970s, an employee remembers that
there was always a sense of trouble on the horizon.
The vulnerability of a company that adds very
little value to its product and relies entirely
on contracts with larger suppliers requires no
explanation. It appears that not long after Central
Chemical became a bulk blender, its large suppliers
began pushing their advantages. In the early 70s,
Central Chemical’s supplier, Agrico Chemical
Company, put pressure on Central Chemical to enter
into a long-term contract. When Central Chemical
refused, Agrico withheld di-ammonium phosphate
and granular triple super phosphate at a time
of national shortage in these materials. Central
Chemical responded by filing an antitrust lawsuit
against Agrico in federal court. For most of the
next decade much of the time, resources, and energy
of what was still a closely-held corporation would
be consumed in this litigation. Ultimately the
lawsuit proved unsuccessful.
All of this came at the same time that local,
state, federal regulators were investigating the
Hagerstown plant for its pesticide-disposal practices.
In the 1970s the State of Maryland ordered two
separate cleanups of the site; the EPA was just
getting started.
Ultimately the push to eliminate the middle man
that drove the switch to bulk blending began to
turn on the blenders themselves. The larger companies
and farmers wised up, and realized that they could
both save money by dealing directly with each
other. Farmers began buying direct-application
materials from the same suppliers used by Central
Chemical. By the early 1980s, Central Chemical’s
network of fertilizer blenders had contracted
substantially. Blending operations like those
of the Hagerstown plant could no longer make the
case for themselves. Crushed under the weight
of increasingly serious environmental liability
for its mid-century disposal practices, the Central
Chemical Corporation contracted its operations
substantially. The Hagerstown plant ceased operations
in 1984 and the office headquarters moved from
the old Thomas building to an office outside Hagerstown.
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