Corn growers blame Mosaic for high fertilizer costs

[ad_1]

Leaders of the National Corn Growers Association and its state affiliates sent a letter to one of the country’s largest fertilizer producers, resuming the tariffs imposed in March at the request of the fertilizer company. Fertilizer prices have since skyrocketed and the NCGA continues to make noise about the situation in the fertilizer market.

As of 2020, all nitrogenous fertilizers are now more than double their price: anhydrous is up 131% and urea is up 110%. Potash is up 120%. In October 2021 alone, the price of anhydrous fertilizer jumped 26% from the previous month to levels not seen since 2008. Urea is up 21% from previous months, and the price of potash is now 13% higher, according to a letter to the Justice Ministry called for an investigation into the rise in fertilizer prices.

The letter to Mosaic says the company has erected an “insurmountable tariff barrier” to keep its main competitors out of the US market at the expense of US farmers since tariffs were imposed in March by the US International Trade Commission.

“Mosaic’s position to date has been a masterpiece of irresponsible corporate social responsibility,” the letter states.

Related: Justice Department Inquiry Wanted for Fertilizer Price Rise

The letter underscored the hold Mosaic has had over its customers and suggested that the company’s monopoly is creating serious problems for farmers.

“… Only 15% of phosphorus imports now enter the United States duty-free,” 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 signatory corn growers say estimates show that tariffs between 30% and 70% on phosphate imports would amount to about $ 480 million to $ 640 million in additional fertilizer bills for U.S. farmers.

Senator Chuck Grassley, R-Iowa, also sent a letter to Attorney General Merrick Garland calling on the DOJ to investigate concerns raised by farmers. In an industry with limited participants, fertilizer companies can afford to manipulate the price farmers pay, he says.

“The DOJ should launch an investigation into the fertilizer market so that farmers across the country can be confident there is no violation of US antitrust law in the fertilizer industry,” Grassley writes. at Garland.

Chris Edgington, President of the NCGA, says, “Fertilizer tariffs impose an incredible financial burden on American farmers. There is no reason for companies like Mosaic Co. and CF Industries to use the government to expand their monopolies at the expense of farmers. That is why we were so grateful that Senator Grassley met us, listened to our story and then took immediate action.

Mosaic asked to reverse the course

Corn growers say the time has come for Mosaic to change course.

“We are asking you to voluntarily withdraw your countervailing duties and allow the return of a critical supply to the United States at a time when supplies are insufficient and phosphate prices are skyrocketing,” they explain.

In an interview with Ben Pratt, senior vice president of government and public affairs at Mosaic, says that if countervailing duties pushed up fertilizer prices domestically, you would see higher prices in the United States compared to other markets. global. “And that’s not the case either. The price of phosphates is certainly high, and it has risen sharply, and we sympathize with the farmers on that. But farmers in Brazil pay the same prices as farmers in the United States and there are no rights on Moroccans or Russians there. “

“One of the reasons the phosphate prices are so high right now is that the prices for the materials we use to make them are all high,” Pratt adds. Ammonia, for example, costs $ 200 per tonne of fertilizer as a raw material.

Shelby Myers, an economist with the American Farm Bureau Federation, explains in detail that there are too many factors to count on what drives up fertilizer prices. However, if anti-dumping and countervailing duties were removed, it would provide some relief to farmers.

“Price increases, especially price increases that can be mitigated or avoided, such as the application of import duties, can have an impact on a farm’s bottom line. Imports constitute an important part of the fertilizer supply to farmers. Enforcement of rights that are potentially in effect for five years, with the possibility of extension, will result in an ongoing limited supply and a higher price imposed on users, ”Myers said.

Myers says she expects fertilizer prices to remain high in the spring, which could force some farmers to shift the area planted from corn to products that use fertilizer at a lower rate, like soybeans or corn. wheat. “With the price of ammonia correlated about 85% with the price of corn, farmers need to consider whether the increased cost of fertilizers and other inputs can be recouped through cash receipts from crop income in order to achieve breakeven point, ”she said.

Preserve essential minerals

A group of seven Republican senators wrote a letter to Acting US Geological Survey Director Dave Applegate urging him not to remove potash from the US Geological Survey, the US Geological Survey’s 2021 Critical Minerals List, and to add phosphate as a critical mineral.

The letter says in part, “We are writing to strongly urge you not to remove potash from the 2021 US Geological Survey, Department of the Interior’s list of critical minerals and add phosphate as a critical mineral. As you know, we are facing a serious shortage of fertilizers for our farmers and ranchers, which more than doubles the prices of potassium and phosphate fertilizers. Nothing is more essential to national security than food security, and without fertilizer America’s crop yields will suffer quickly, as will Americans who have long enjoyed affordable food prices. “

The letter was signed by Senators John Boozman, R-Ark., Grassley, John Hoeven, R-ND, Mike Braun, R-Ind., John Thune, RS.D., Roger Marshall, R-Kan., And Tommy Tuberville. , R-Ala.

Jacqui Fatka, longtime policy editor at Farm Futures, will bring her valuable information on agricultural policy to the stage of the Business Summit in Iowa City, IA on January 20-21, 2021. With industry experts and in-depth training sessions, it is an opportunity to gain clear ideas for a profitable future. Use code BOGO22 to benefit from a reduced rate for one guest. Learn more and register now!

[ad_2]