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1. Organic fertilizer production business plan for starting your own organic fertilizer business
The agriculture industry is a vast industry and investing in it brings good fortune. This bio-organic fertilizer business plan sample will help you take the best steps for initiating your own business. Firstly you can decide which product you want to produce. For this, you can get an idea through market research and analysis. Secondly, you will work on market strategies in order to penetrate the market and get the maximum business share.
Thirdly, budgeting is a mandatory part of the organic farm business plan and this plan helps you make an excellent financial plan to map out all the transactions. Lastly, you can obtain a profitable market plan to confidently enter the agriculture market. You can find more samples too like Garlic Farm Business Plan.
2. Executive Summary
The Business
The Greenpro Organic Fertilizer is starting a fertilizer business for producing organic fertilizer through the process of daily food waste recycling. This idea reduces the utilization of chemical fertilizers ultimately protecting the ecosystem from the harmful impact of toxic chemicals.
Organic fertilizers, produced by Greenpro Organic Fertilizer, not only make the environment clean but also resolve problems aroused by food waste produced by our daily consumption and food industries.
Technically, our raw material source is food waste for producing organic fertilizers. So our business will be producing cash practically from the trash. It significantly decreases the material production cost.
Business Target
The development of an Agriculture Farm Business Plan for organic animal feed and organic fertilizer manufacturing will serve a multitude of markets such as small-scale to large-scale farm producers, farming cooperatives, gardeners, and institutional agricultural departments.
The plantation and agriculture sectors are the major clients who require huge amounts of fertilizers to boost their productivity. We will also put our efforts into educating farmers as well as household individuals to expend organic fertilizers for the purposes of plantation and all houseplants.
The Greenpro Organic Fertilizer’s financial projections show a viable business having the potential of generating significant profit in the upcoming years.
3. Company Summary
The Greenpro Organic Fertilizer will be established as a manufacturer for transforming food waste into organic fertilizers through the fermentation method. We ensured our business location in an accessible area that enables us to grow and offer better services than existing similar businesses.
We will always go the extra mile to make our customers satisfied with our services and products. We will promote our business by conducting seminars, conferences, TVC ads, and distributing pamphlets and advertising boards all across the country.
Our IT department will maintain our website with all the necessary information available on it. We will strengthen our presence on Social media channels such as Facebook, Instagram, Twitter, and LinkedIn.
Company Owner
Greenpro Organic Fertilizer is owned and managed by Mr. Alex Mag. He holds a Masters’s degree in agriculture as well as Masters’s degree in Business Management. He has worked for almost 18 years in the field of agriculture with different companies.
Why the fertilizer business is being started
Mr. Alex Mag, based on his interest and extensive experience, took the initiative of starting his own business organic fertilizer. He has a good understanding of how to start a manure business or organic fertilizer business, and how it can contribute to making our environment safe for humankind.
How the fertilizer company will be started
This organic fertilizer production project will be started as an environment-friendly business to provide chemical-free organic products to clients & educate people about organic fertilizer significance.
The company hierarchy outlines all employees such as the General manager, Production Manager, Operations Manager, Engineering head, and workers. They will be responsible for the production of high-quality organic fertilizers meeting customer needs.
Note
IT and Marketing department will promote our business and products through online or print media, Word of mouth & seminars, to attract a huge number of clients.
The finance department will maintain all startup costs, budgets, marketing expenses, and profits. This organic fertilizer business plan template includes all the details to successfully initiate a business.
| Start-up Expenses | |
| Legal | $116,800 |
| Consultants | $0 |
| Insurance | $12,000 |
| Rent | $30,000 |
| Research and Development | $10,000 |
| Expensed Equipment | $28,000 |
| Signs | $3,000 |
| TOTAL START-UP EXPENSES | $199,800 |
| Start-up Assets | $250,000 |
| Cash Required | $165,000 |
| Start-up Inventory | $40,000 |
| Other Current Assets | $220,000 |
| Long-term Assets | $235,600 |
| TOTAL ASSETS | $910,600 |
| Total Requirements | $1,110,400 |
| START-UP FUNDING | |
| Start-up Expenses to Fund | $199,800 |
| Start-up Assets to Fund | $910,600 |
| TOTAL FUNDING REQUIRED | $1,110,400 |
| Assets | |
| Non-cash Assets from Start-up | $1,200,600 |
| Cash Requirements from Start-up | $296,500 |
| Additional Cash Raised | $48,000 |
| Cash Balance on Starting Date | $36,000 |
| TOTAL ASSETS | $1,581,100 |
| Liabilities and Capital | |
| Liabilities | $18,500 |
| Current Borrowing | $0 |
| Long-term Liabilities | $0 |
| Accounts Payable (Outstanding Bills) | $70,000 |
| Other Current Liabilities (interest-free) | $0 |
| TOTAL LIABILITIES | $88,500 |
| Capital | |
| Planned Investment | $1,110,400 |
| Investor 1 | $0 |
| Investor 2 | $0 |
| Other | $0 |
| Additional Investment Requirement | $0 |
| TOTAL PLANNED INVESTMENT | $1,110,400 |
| Loss at Start-up (Start-up Expenses) | $382,200 |
| TOTAL CAPITAL | $1,492,600 |
| TOTAL CAPITAL AND LIABILITIES | $1,581,100 |
| Total Funding | $1,110,400 |
4. Services of Fertilizer Company
This sample business plan for organic fertilizer highlights various services offered by the Greenpro Organic Fertilizer.
- Bulk and Bagged Fertilizer Blending and Delivery: Providing custom blended fertilizer and soil amendment mixes to meet customer needs, delivered in bulk or in bags, to farms, turf and landscape, nurseries, and commercial sites.
- Soil Analysis, Recommendation and production: Conduct soil tests and recommend the best fertilizers, soil amendments, and cultural practices for each site and crop and production of organic manure.
- Plant Tissue Analysis: Taking and analyzing plant samples to determine nutrient deficiencies and other problems and recommending corrective action.
- Nutrient Management Planning: Develop nutrient management plans to meet the specific needs of each crop and site.
- Nutrient and Weed Control: Recommending and supplying the most appropriate fertilizers and herbicides for each crop and site.
- Fertilizer Application: Applying fertilizer to crops, turf, and landscape sites.
- Custom Blending: Creating custom fertilizer blends for specific crops, soils, and sites.
- Fertilizer Mixing: Mixing and blending different fertilizer products to create a custom mix.
- Soil Conditioning: Applying soil amendments to improve soil structure, fertility, and drainage.
- Organic Fertilizers and Amendments: Supplying organic fertilizers and amendments to meet customer needs.
- Environmental Protection: Ensuring safe and responsible use of fertilizers and other products to protect the environment.
5. Marketing Analysis
Marketing analysis discovers the needs of the people, the trend of the market, and tells how to make commercial organic fertilizer, the target market & segments, competition strategy, and pricing trend.
Marketing analysis is an important part of the marketing plan for organic fertilizer that gives insights into how many customers can be attracted at a time and how our products can compete with the market-leading brands.
Market Trends
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Organic products and organic fertilizer is rising day by day. The focus of nutritionists on organic food has sparked the fortune of organic fertilizer industries. Organic fertilizers have a huge importance for organic crop cultivation.
Marketing Segmentation
Our Greenpro Organic Fertilizer has categorized the targetted customers of organic fertilizers into four segments organic farmers, inorganic farmers, estate owners and retailers. Estate owners are selected because of the huge plantation and they need fertilizers in bulk.
| Market Analysis | |||||||
| Potential Customers | Growth | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
| Organic Farmers | 33% | 40,000 | 48,000 | 57,600 | 69,120 | 82,944 | 10.00% |
| Inorganic Farmers | 32% | 35,000 | 42,000 | 50,400 | 60,480 | 72,576 | 10.00% |
| Retailers | 20% | 25,000 | 30,000 | 36,000 | 43,200 | 51,840 | 10.00% |
| Estate Owners | 15% | 15,000 | 18,000 | 21,600 | 25,920 | 31,104 | 11.00% |
| Total | 100% | 115,000 | 138,000 | 165,600 | 198,720 | 238,464 | 10% |
Business Target
The organic fertilizer market is undoubtedly huge as it has uses in various segments. Based on our market research we will be providing organic fertilizers to organic and non-organic crop farmers and estate owners through retailers and wholesalers. This is because the major business chunk lies here.
Product Pricing
Like other markets, the pricing trend also keeps on changing in the organic fertilizer industry. Greenpro Organic Fertilizer has also designated the prices based on the sizes and packages.
We will be following the penetration pricing strategy initially for at least 12 months. This will lower our profit margins but it will greatly help us to maintain shelf level in the market.
6. Marketing Strategy of Fertilizer Company
The marketing strategy for how to sell fertilizer to farmers, gardeners, and other related customers is derived from marketing analysis. Marketing strategy helps to gain our desired results by properly focusing on the set targets.
Competitive Analysis
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The organic fertilizer commercial industry has become notably competitive. You must come up with an innovation in order to gain a good share of the market. Moreover, keep a constant eye on the competition so that they will not engage your customers.
Sales Strategy
Sales Strategy includes selling our products into properly packaged fertilizer bags such as 10kg, 25kg,50kg, and above based on targeted customers. These will be sold to different retail stores/wholesalers of organic fertilizers. Furthermore, engage customers through social media accounts. A compensation plan can be offered to attract more clients such as bonus on bulk purchases.
Sales Monthly
Targeted Monthly sales should be maintained as follows;
Sales Yearly
Targeted yearly sales should be maintained as follows;
Sales Forecast
Following is the sales forecast
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| Manufacturing & Setting Up Solar Cells | 5,000 | 5,300 | 5,618 |
| Organic Farmers | 1,500 | 1,590 | 1,685 |
| In-organic Farmers | 900 | 954 | 1,011 |
| Awarness campaign | 3,300 | 3,498 | 3,708 |
| TOTAL UNIT SALES | 10,700 | 11,342 | 12,023 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| Organic Farmers | $985.00 | $1,142.60 | $1,325.42 |
| In-organic Farmers | $1,540.00 | $1,786.40 | $2,072.22 |
| Retailers | $2,000.00 | $2,320.00 | $2,691.20 |
| Awarness campaign | $800.00 | $928.00 | $1,076.48 |
| Sales | |||
| Organic Farmers | $4,925,000.00 | $6,055,780.00 | $7,446,187.09 |
| In-organic Farmers | $2,310,000.00 | $2,840,376.00 | $3,492,526.33 |
| Retailers | $1,800,000.00 | $2,213,280.00 | $2,721,449.09 |
| Awarness campaign | $2,640,000.00 | $3,246,144.00 | $3,991,458.66 |
| TOTAL SALES | $11,675,000.00 | $14,355,580.00 | $17,651,621.17 |
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| Organic Farmers | $974.00 | $1,071.40 | $1,124.97 |
| In-organic Farmers | $1,490.00 | $1,639.00 | $1,720.95 |
| Retailers | $1,990.00 | $2,189.00 | $2,298.45 |
| Awarness campaign | $795.00 | $874.50 | $918.23 |
| Direct Cost of Sales | |||
| Manufacturing & Setting Up Solar Cells | $4,870,000.00 | $5,678,420.00 | $6,320,081.46 |
| Organic Farmers | $2,235,000.00 | $2,606,010.00 | $2,900,489.13 |
| In-organic Farmers | $1,791,000.00 | $2,088,306.00 | $2,324,284.58 |
| Retailers | $2,623,500.00 | $3,059,001.00 | $3,404,668.11 |
| Subtotal Direct Cost of Sales | $11,519,500.00 | $13,431,737.00 | $14,949,523.28 |
7. Personnel Plan of Fertilizer Company
Company Staff
Based on Greenpro Organic Fertilizer’s hierarchy all the professional staff will be hired based on their competency and experience. Based on the sample business plan for biofertilizer company following employees will be hired.
- CEO
- COO
- CFO
- Director Operations
- Director of Sales & Marketing
- Plant Director
- Plant Manager
- Head of HR & Administration
- Head of IT department
- Financial Analyst
OTher supporting staff includes
- Accounting clerks
- Marketing Managers
- Receptionist
- Office Assistants
- HR managers/officers
- IT managers/officers
- Admin officers and experts
- Janitorial Staff
Moreover, there must be a field staff of the company as follows;
- Project Managers
- External Auditors
This hierarchy can be used for multiple businesses such as State Farm Agent Business Plan.
Average Salary of Employees
The average salary for sports agency employees is $60,000. The salary is based on the average salary of all employees, including those in administration, marketing, and sales.
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| CEO | $40,000 | $44,000 | $48,400 |
| CFO | $38,000 | $41,800 | $45,980 |
| COO | $39,000 | $42,900 | $47,190 |
| Management | $150,000 | $165,000 | $181,500 |
| Field Staff | $75,000 | $82,500 | $90,750 |
| Supporting Staff | $100,000 | $110,000 | $121,000 |
| Drivers | $30,000 | $33,000 | $36,300 |
| Total Salaries | $472,000 | $519,200 | $571,120 |
8. Financial Plan for Fertilizer Company
Financials of the organic fertilizer production business plan should be calculated carefully in order to correctly estimate the costs, expenses, and profits. Financial reports should be regularly generated to keep proper records. CEO will monitor the financial statements on monthly basis to check all transactions.
Important Assumptions
An organic fertilizer company’s financial plan is based on the following assumptions:
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 7.11% | 7.11% | 7.19% |
| Long-term Interest Rate | 7.35% | 7.35% | 7.44% |
| Tax Rate | 23.01% | 23.01% | 23.09% |
| Other | 0 | 0 | 0 |
It is expected that variances will be kept to levels that will not negatively impact the organic fertilizer company’s major financial goals.
Brake-even Analysis
The following is a breakdown of the iorganic fertilizer company’s fixed and variable costs:
A monthly break-even analysis of an organic fertilizer company is shown in the following table.
| Break-Even Analysis | |
| Monthly Units Break-even | 5339 |
| Monthly Revenue Break-even | $131,850 |
| Assumptions: | |
| Average Per-Unit Revenue | $233.00 |
| Average Per-Unit Variable Cost | $0.68 |
| Estimated Monthly Fixed Cost | $166,200 |
Projected Profit and Loss
A fertilizer made from organic materials will make the following profits and losses.
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $11,675,000 | $14,355,580 | $17,651,621 |
| Direct Cost of Sales | $11,519,500 | $13,431,737 | $14,949,523 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $11,519,500 | $13,431,737 | $14,949,523 |
| Gross Margin | $155,500 | $923,843 | $2,702,098 |
| Gross Margin % | 1.33% | 6.44% | 15.31% |
| Expenses | |||
| Payroll | $472,000 | $519,200 | $571,120 |
| Sales and Marketing and Other Expenses | $133,000 | $136,000 | $138,000 |
| Depreciation | $2,100 | $2,200 | $2,400 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $2,800 | $2,900 | $3,000 |
| Insurance | $2,100 | $2,100 | $2,100 |
| Rent | $3,400 | $3,500 | $3,600 |
| Payroll Taxes | $22,000 | $23,000 | $24,000 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $637,400 | $688,900 | $744,220 |
| Profit Before Interest and Taxes | ($481,900) | $234,943 | $1,957,878 |
| EBITDA | ($481,900) | $234,943 | $1,957,878 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | ($96,380) | $46,989 | $391,576 |
| Net Profit | ($385,520) | $187,954 | $1,566,302 |
| Net Profit/Sales | -3.30% | 1.31% | 8.87% |
Profit Monthly
Profit Yearly
Gross Margin Monthly
Gross Margin Yearly
Projected Cash Flow
Below is a chart showing cash flow projections.
An organic fertilizer company’s pro forma cash flow is shown in the following table. General assumptions are included in the cash flow statement.
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $50,000 | $54,000 | $58,320 |
| Cash from Receivables | $25,000 | $27,000 | $29,160 |
| SUBTOTAL CASH FROM OPERATIONS | $75,000 | $81,750 | $88,290 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $80,000 | $87,000 | $93,000 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $37,000 | $38,000 | $40,000 |
| Bill Payments | $24,000 | $27,000 | $28,000 |
| SUBTOTAL SPENT ON OPERATIONS | $61,000 | $65,000 | $68,000 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $62,000 | $66,960 | $72,317 |
| Net Cash Flow | $21,000 | $24,000 | $25,000 |
| Cash Balance | $27,000 | $30,000 | $32,000 |
Projected Balance Sheet
As shown in the following balance sheet, the pro forma balance sheet of the anorganic fertilizer company shows the total assets, total liabilities, current subtotal liabilities, total capital, and total liabilities.
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $291,142 | $326,079 | $358,687 |
| Accounts Receivable | $25,877 | $28,982 | $32,576 |
| Inventory | $6,511 | $7,292 | $4,900 |
| Other Current Assets | $2,907 | $2,507 | $2,507 |
| TOTAL CURRENT ASSETS | $326,437 | $364,861 | $398,670 |
| Long-term Assets | |||
| Long-term Assets | $9,755 | $9,755 | $9,755 |
| Accumulated Depreciation | $18,222 | $20,409 | $22,960 |
| TOTAL LONG-TERM ASSETS | $28,300 | $31,696 | $35,658 |
| TOTAL ASSETS | $354,737 | $396,557 | $434,328 |
| Liabilities and Capital | Year 4 | Year 5 | Year 6 |
| Current Liabilities | |||
| Accounts Payable | $19,800 | $22,176 | $24,926 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $19,800 | $22,176 | $24,926 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $16,700 | $18,704 | $21,023 |
| Paid-in Capital | $49,237 | $61,372 | $63,662 |
| Retained Earnings | $58,500 | $63,765 | $70,142 |
| Earnings | $174,000 | $189,660 | $208,626 |
| TOTAL CAPITAL | $338,037 | $377,853 | $413,304 |
| TOTAL LIABILITIES AND CAPITAL | $354,737 | $396,557 | $434,328 |
| Net Worth | $298,760 | $325,648 | $358,213 |
Business Ratios
An organic fertilizer company’s business ratios, ratio analysis, and total assets are shown in the following table.
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | INDUSTRY PROFILE | |
| Sales Growth | 6.26% | 6.94% | 7.69% | 3.00% |
| Percent of Total Assets | ||||
| Accounts Receivable | 8.25% | 9.14% | 10.13% | 9.80% |
| Inventory | 5.00% | 5.54% | 6.14% | 9.90% |
| Other Current Assets | 2.25% | 2.49% | 2.76% | 2.40% |
| Total Current Assets | 140.30% | 151.00% | 152.00% | 158.00% |
| Long-term Assets | 12.58% | 11.60% | 11.64% | 12.00% |
| TOTAL ASSETS | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 4.58% | 4.62% | 4.66% | 4.34% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 0.00% |
| Total Liabilities | 7.51% | 7.57% | 7.64% | 7.38% |
| NET WORTH | 100.03% | 100.83% | 101.76% | 110.00% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 91.65% | 94.12% | 96.76% | 99.00% |
| Selling, General & Administrative Expenses | 93.80% | 96.33% | 99.03% | 97.80% |
| Advertising Expenses | 1.44% | 1.48% | 1.52% | 1.40% |
| Profit Before Interest and Taxes | 38.90% | 39.95% | 41.07% | 33.90% |
| Main Ratios | ||||
| Current | 33 | 34 | 35 | 33 |
| Quick | 32 | 33.2 | 34.03 | 33 |
| Total Debt to Total Assets | 0.18% | 0.18% | 0.17% | 0.40% |
| Pre-tax Return on Net Worth | 72.68% | 74.24% | 75.00% | 75.00% |
| Pre-tax Return on Assets | 96.88% | 101.72% | 106.81% | 111.30% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 35.51% | 36.61% | 37.75% | N.A. |
| Return on Equity | 57.20% | 58.97% | 60.80% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 7.7 | 7.7 | 7.8 | N.A. |
| Collection Days | 100 | 100 | 100 | N.A. |
| Inventory Turnover | 28.3 | 29.715 | 32 | N.A. |
| Accounts Payable Turnover | 14.9 | 16 | 16.3 | N.A. |
| Payment Days | 28 | 27 | 27 | N.A. |
| Total Asset Turnover | 2.6 | 2.5 | 2.6 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | -0.04 | -0.03 | -0.04 | N.A. |
| Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $238,000 | $251,328 | $265,402 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0.85 | 0.87 | 0.89 | N.A. |
| Current Debt/Total Assets | 1% | 0% | 0% | N.A. |
| Acid Test | 28.06 | 28.13 | 28.77 | N.A. |
| Sales/Net Worth | 2.1 | 2.2 | 2.2 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
9. FAQ
- Is the organic fertilizer business profitable?
Yes, organic fertilizer businesses can be very profitable. The increasing demand for organic fertilizer due to its environmental benefits and the availability of government grants and incentives to promote organic agriculture make this a potentially lucrative business opportunity. Additionally, organic fertilizer businesses typically have high margins and benefit from repeat customers. - What raw materials are used to make fertilizer?
The raw materials used to make fertilizer vary depending on the type of fertilizer being made. Generally, fertilizer is made from various forms of nitrogen, phosphorus, and potassium, which can be derived from both organic and synthetic sources. Organic sources of these nutrients may include animal manure, compost, bone meal, blood meal, and seaweed. Synthetic sources may include ammonium nitrate, urea, and potassium chloride. Other raw materials may include limestone, magnesium, and sulfur.
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