What is compost?
Compost is, literally, fertile dirt.
That is to say, not the barren gray top soil you’ll find on a building site or in a conventional farmer’s field. This is the good black stuff that smells sweet and makes nice little crumbly clumps. It contains the perfect balance of nutrients that your plants need to be healthy and that the microorganisms and beneficial insects like earth worms–key components of healthy soil–need to thrive.
You can make it yourself using common kitchen and yard wastes that would otherwise go in the landfill using a process Mother Nature has used to recycle things in the natural world since time began. Want a list of things you can put in the compost bin? Plantea lists 163 of them! Then you can use it in place of expensive mulches and chemical fertilizers. As a mulch, compost helps retain moisture and shade a plant’s roots.
As a soil amendment, compost breaks up heavy clay soils, allowing more water and air to penetrate to the root zone of garden plants and, if added in high enough quantities over time to keep the organic matter of the garden soil at 4-5%, can provide sufficient nutrients for even nitrogen-hungry vegetable growth.
Info from Julie at Terminal Verbosity.