I'm studying abroad in Chile right now and taking a Chilean history course, and this week we've been covering the Great Depression and how much the country basically got screwed by its dependence on nitrate exports. My prof and textbook are pretty much saying that the crash here happened because the countries that Chile exported to were hit by the Depression before Chile and therefore had to close their markets, which meant that Chile then had no one to export to, and therefore their economy crashed as well.
However, it seems to me like the nitrate industry was going to decline no matter what because Chile's tariff on it was so high and other countries had already made chemical substitutes (lowering the demand), and that the Great Depression just made that decline happen even faster and possibly a bit sooner than it would have otherwise. Am I correct in any way about this? If I am, is it possible to estimate when this hypothetical decline would have taken place and how severely it would have affected Chile versus the actual decline?
As far as what actually happened your professors are correct in that the economy collapsed due to the Great Depression. However, if the Great Depression was the only factor Chile should have experienced a huge economic boom during WW2 (which in large part they did) and then should have continued to experience normal growth after supplying the cold war world with ammonium nitrate. As you say the Haber process largely killed the need for nitrate mining by the 1950's.
Much of this shift was done to ensure a steady supply of native produced nitrates in the case of war and so would not have been impacted by the tariff. However, the tariff did increase the rate at which Chilean nitrates were priced out of the market for fertilizers.
By the 1970's denitrification of wastewater became a major issue and began to have serious impacts on the nitrate market. Expansion of industrial scale farming during WW2 especially for hogs and chicken greatly increased the amount of waste nitrogen. In a theoretical world in the early 70's due to domestic production of waste nitrogen Chilean Nitrates would likely have become economically unsustainable.
Article about nitrogen from an agricultural perspective
1948 USDA publication "ammonium nitrate for crop production"
1974 US EPA paper "nitrification and denitrification facilities for wastewater treatment"
Denitrification is not entirely for agricultural use much of the time it is meant to release nitrogen to the atmosphere. But the 70's saw a huge jump in products to use wastewater for crop production including the chopper pump, the slurry pump, the horizontal auger dredge and several drag line and injector models. But I'm afraid that outside the industry I'm hard pressed for a solid source not many historians working the history of wastewater treatment.