Compost is one of nature's best mulches and soil amendments, and you can use it instead of commercial fertilizers. Using compost improves soil structure, texture, and aeration and increases the soil's water-holding capacity. Compost loosens clay soils and helps sandy soils retain water. Adding compost improves soil fertility and stimulates healthy root development in plants. The organic matter in compost provides food for microorganisms, which keeps the soil in a healthy, balanced condition. This allows nutrients to be produced naturally by the feeding of the microorganisms, so few if any soil amendments will need to be added.