This fall, farmers have watched the price of fertilizer spike at an alarming rate. However, producers and organizations are suspicious of the increase in price. The Family Farm Action Alliance, an organization that often speaks out against large corporations’ involvement in our food sector, sent a letter to the Antitrust Division of the Department of Justice calling for an investigation into the highly-consolidated fertilizer sector on the suspicion of anti-competitive practices.
In the letter, the Family Farm Action Alliance writes, “We are requesting that the Antitrust Division of the Department of Justice (DOJ) examine these troubling trends. We maintain that these corporations are using their monopoly power to raise and lower the price charged to farmers not based on basic supply and demand, but rather on the price the farmer is paid for their commodity crops.”
According to the news release from the group, recent record-breaking fertilizer prices suspiciously coincide with an increase in income farmers are earning from commodity crops like soybeans and corn. While fertilizer corporations claim these prices are the result of shortages and high natural gas prices, their own annual and quarterly reports refute these claims and reveal they have additional capacity they’re not utilizing.
The Family Farm Action Alliance describes itself as leveraging “research, policy development, and advocacy to fight corporate monopolies and achieve a fair, inclusive, and competitive food and agriculture system.”
Today, just two companies supply the entirety of North America with potash, a potassium-based fertilizer: Nutrien Limited and the Mosaic Company. In 2019, four corporations represented 75 percent of the production and sale of nitrogen-based fertilizer in the U.S. According to some experts, market abuses are more likely when the concentration ratio of the top four firms (CR4) exceeds 40 percent.
“If these fertilizer corporations are tying the price of their products to the farmer’s ability to pay rather than supply and demand, that equates to an exercise of near-monopoly power,” said Dr. Philip Howard of the International Panel of Experts on Sustainable Food Systems. “Left unchecked, this allows concentrated corporations to exact additional tolls from the supply chain, leaving the farmer with no hope of retaining any gains they produce.”
The Family Farm Action Alliance wants the DOJ to open an investigation to determine to what extent the actions of these consolidated fertilizer firms are distorting the market, the resulting impact on farmers, and whether policy intervention will be necessary to remediate such distortions.
“Out here in farm country, we can tell that something stinks about this fertilizer deal,” said Joe Maxwell, founder and president of the Family Farm Action Alliance a former lieutenant governor of Missouri. “The DOJ has the power and the authority to investigate fully, and American farmers deserve nothing less.”
