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USDA announces $500M in grants to boost American fertilizer

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U.S. Department of Agriculture Secretary Tom Vilsack said that $500 million in grants will be available to increase the availability of American-made fertilizer production. This action comes in response to a need for spurred competition to combat price hikes on U.S. farmers caused by the war in Ukraine.

Grants will be used to support independent, innovative, and sustainable American fertilizer production to supply American farmers. Funds also will expand the manufacturing and processing of fertilizer and nutrient alternatives in the U.S. and its territories.

“The U.S. has one of the strongest and most competitive fertilizer industries in the world, being one of only three nations that have at least 20 unique companies producing fertilizer products,” said Corey Rosenbusch, president and CEO of The Fertilizer Institute. “The U.S. fertilizer industry consists of large international corporations, small regional producers, and everything in between. They all play a critical role in supplying farmers with the nutrients required to grow the food that feeds the world. While a nitrogen plant can cost between $2 billion and $4 billion to construct, anything that helps strengthen domestic fertilizer production is a win for the industry, growers, and consumers.”

farmland-fertilizer-tractor
Image by Fotokostic, Shutterstock

The program will support fertilizer production that is:

  • Independent, and outside the orbit of dominant fertilizer suppliers. Because the program’s goal is to increase competition, market share restrictions apply.
  • Made in America. Products must be produced by companies operating in the U.S. or its territories, to create good-paying jobs at home, and reduce the reliance on potentially unstable, inconsistent foreign supplies.
  • Innovative. Techniques will improve fertilizer production methods and efficient-use technologies to jumpstart the next generation of fertilizers and nutrient alternatives.
  • Sustainable. Ideally, products will reduce the greenhouse gas impact of transportation, production and use through renewable energy sources, feedstocks and formulations, incentivizing greater precision in fertilizer use.
  • Farmer-focused. Like other Commodity Credit Corporation investments, a driving factor is providing support and opportunities for U.S. agricultural commodity producers.

The maximum award is $100 million. The minimum award is $1 million. The grant term is five years. The Department will begin accepting applications in the coming days. Notably, there will be two opportunities for submission.

Eligible entities are for‐profit businesses and corporations, nonprofit entities, Tribes and Tribal organizations, producer‐owned cooperatives and corporations, certified benefit corporations, and state or local governments. Private entities must be independently owned and operated to apply.

The USDA plans for a 45-day application window for applicants to receive priority for projects that increase the availability of fertilizer (nitrogen, phosphate, or potash) and nutrient alternatives for agricultural producers to use in crop years 2023 or 2024.

The department will also offer an extended application window, providing an additional 45 days (90-day application window) to receive applications for financial assistance to significantly increase American-made fertilizer production to spur competition and combat price hikes. This extended application window will support applicants who need more time to make additional capacity available.

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