Farmers have observed the rise in prices of fertilizers since the beginning of this year and never ending. Fertilizer prices continue to soar, up to 300 percent in some areas, as farmers grapple with increased costs as they prepare for the 2022 growing season.
Rising fertilizer prices
According to a recent Market Intel report from the American Farm Bureau Federation, Farm Bureau economists found that several things contributed to the record high prices, including rising prices for raw nutrients, including nitrogen, phosphorus, and potassium; increased global demand for fertilizers; increased energy costs; distribution and supply chain disruptions; and commercial rights.
âRising fertilizer prices are of great concern to farmers across the country,â said AFBF President Zippy Duvall. âThe rising cost of supplies is slowing the momentum that American farmers were starting to gain from rising commodity prices and increased demand for their produce. Hard-working families need to be able to do more than just break even. “
One of the biggest issues in increasing the price of fertilizer comes from tariffs. One of the country’s leading fertilizer companies has erected an insurmountable tariff barrier to prevent its main competitors from entering the US market to the detriment of American farmers, according to a letter released this week by the National Corn Growers Association.
Executives from the NCGA and its state affiliates sent the letter to Mosaic Company, one of the country’s largest fertilizer producers. The letter criticizes Mosaic for tariffs imposed in March by the US International Trade Commission at the request of the fertilizer company. Since then, fertilizer prices have skyrocketed.
âMosaic’s position to date has been a masterpiece of irresponsible corporate social responsibility,â the letter states.
The letter underscored the hold Mosaic has had over its customers and suggested that the company’s monopoly is creating serious problems for farmers. ââ¦ Only 15% of phosphorus imports now enter the United States duty-free,â the letter notes. “And experts say that using Commerce and ITC to manipulate the supply curve actually dictates the price to farmers.”
To illustrate their point, the signatories said estimates show that tariffs of between 30% and 70% on phosphate imports would amount to about $ 480 million to $ 640 million in additional fertilizer bills for U.S. farmers.
However, in a press release this week, The Mosaic Company refuted that, claiming that “phosphate imports are entering the United States at record levels.”
The press release read: âIn June 2021, the US International Trade Commission imposed a countervailing duty on imports of Moroccan and Russian phosphate fertilizers due to unfair foreign subsidies. Regardless of this, imports of phosphates are entering the United States at record levels and from a more diverse supply base. In fact, US imports of phosphate increased by 1.3 million metric tonnes in 2021, 57% more than in the same period from January to November 2020. This has resulted in a more balanced and larger market. fair trade, which creates a more competitive environment with trusted and reliable suppliers for US farmers and US agriculture in the long run.
âIn any given year, 90% of global fertilizer consumption occurs outside of the United States, as other countries around the world continue to increase their grain production to meet growing demand. Phosphate prices in the United States are currently $ 20 to $ 100 per tonne lower than other major agricultural markets such as Brazil, India and Europe. Claims that countervailing duties drive up US prices are simply not true. “
According to a recent Market Intel report from the Farm Bureau, âIn addition to increasing shipping rates for the 44% of fertilizer exported to the world, anti-dumping trade litigation is also likely increasing fertilizer costs, although there is not enough public data available to indicate by how much. But the report continues: âIn 2018, US imports of fertilizers from Morocco and Russia increased by more than 2.4 MMT. Then the anti-dumping case was filed against these countries and imports to the United States from Morocco and Russia declined. Mosaic, the largest US producer of phosphate, won the anti-dumping lawsuit and a 30% tariff was applied to phosphate imports. “
Corn growers said now is the time for Mosaic to change course. “We call on you to voluntarily withdraw your countervailing duties and allow a return of critical supply to the United States at a time of under-supply and soaring phosphate prices,” they said.
In recent months, the NCGA and state corn growers have sounded the alarm bells about the effects of fertilizer tariffs on farmers. The NCGA, along with other farm groups, submitted an amicus brief in November in a case filed in the United States International Trade Tribunal to overturn the tariffs. A decision in this case is not expected before the summer of 2022.