Farmers have been watching the rise in fertilizer prices since the beginning of this year and to no end in sight. Fertilizer prices continue to skyrocket, as much as 300 percent in some areas, as farmers grapple with increased costs as they prepare for the 2022 growing season.
Rise in fertilizer prices
According to a recent Market Intel report from the American Farm Bureau Federation, Farm Bureau economists found several elements are contributing to record-high prices including increased prices for raw nutrients including nitrogen, phosphorus and potassium; increased global fertilizer demand; increased energy costs; distribution and supply chain disruptions; and trade duties.
“Rising fertilizers prices are a great concern for farmers across the country,” said AFBF President Zippy Duvall. “The rising cost of supplies is slowing down the momentum America’s farmers were starting to build through higher commodity prices and increased demand for their products. Hard-working families must be able to do more than just break-even.”
One of the biggest questions in the rise of the fertilizer price tag comes from tariffs. One of the nation’s leading fertilizer companies has erected an insurmountable tariff barrier to keep its top competitors out of the U.S. market at the expense of America’s farmers, according to a letter released this week by the National Corn Growers Association.
Leaders from NCGA and its state affiliates sent the letter to Mosaic Company, one of the nation’s largest fertilizer producers. The letter takes Mosaic to task for the tariffs that were imposed in March by the U.S. International Trade Commission at the fertilizer company’s behest. Fertilizer prices have since skyrocketed.
“Mosaic’s posture to date has been a masterpiece of irresponsible corporate social responsibility,” the letter says.
The letter highlighted the stranglehold Mosaic has placed on its customers and suggested the company’s monopoly is creating serious problems for farmers. “…only 15% of phosphorous imports now come into the U.S. without tariffs,” the letter notes. “And experts say that using Commerce and ITC to manipulate the supply curve does indeed dictate price to farmers.”
To illustrate their point, the signatories said estimates show that tariffs between 30% and 70% on phosphate imports would equate to roughly $480 to $640 million in added fertilizer bills on U.S. farmers.
However, in a news release this week, The Mosaic Company refuted that, claiming, “phosphate imports have been coming into the U.S. at record levels.”
The press release says, “In June 2021, the U.S. International Trade Commission issued a countervailing duty on Moroccan and Russian phosphate fertilizer imports due to unfair foreign subsidies. Irrespective of this, phosphate imports have been coming into the U.S. at record levels, and from a more diversified supply base. In fact, U.S. phosphate imports increased by 1.3 million metric tons in 2021, which is 57% higher than during the same January-to-November period in 2020. This has resulted in a more balanced and fair-trade market, which creates a more competitive environment with trusted and reliable suppliers for American farmers and American agriculture in the long term.
“In any given year, 90% of global fertilizer consumption occurs outside the U.S., as other countries around the world continue to increase grain production to meet increased demand. Phosphate prices in the U.S. are currently $20 to $100 per ton less than in other major agricultural markets such as Brazil, India, and Europe. Assertions that the countervailing duties are driving U.S. prices higher are simply untrue.”
According to a recent Market Intel report from Farm Bureau, “Along with increased shipping rates for the 44% of fertilizer that is exported across the world, anti-dumping trade dispute cases are also likely increasing fertilizer costs, though there is not enough current publicly available data to indicate by how much.” But the report continued, ” In 2018, U.S. imports of fertilizer materials from Morocco and Russia were up over 2.4 MMT. Then, the anti-dumping case was filed against those countries and imports to the U.S. from Morocco and Russia declined. Mosaic, the largest U.S. producer of phosphate, won the anti-dumping case and a 30% tariff was applied to phosphate imports. “
The corn growers said that now is a good time for Mosaic to reverse course. “We ask that you voluntarily withdraw your countervailing duties and allow critical supply back into the U.S. at a time of inadequate supplies and soaring phosphate prices,” they said.
In recent months, NCGA and state corn growers have sounded the alarm about the effects fertilizer tariffs are having on farmers. NCGA, along with other ag groups, submitted an amicus brief in November in a case filed in the U.S. Court of International Trade seeking to overturn the tariffs. A ruling in that case is not expected any earlier than summer of 2022.