Taking on fertilizer prices
Iowa’s farmers, like all Americans, are seeing their budgets squeezed by inflation and other financial challenges, not the least of which are record fertilizer prices.
In my conversations with Farm Bureau members from all over Iowa, I’ve heard concerns about the impact that record fertilizer prices are having on balance sheets this year and the risk those prices pose to the viability of our farms going forward.
Fertilizer prices haven’t just shot up to record levels, they’ve tripled or quadrupled — reaching levels I couldn’t have imagined a couple years ago. On my farm, nitrogen fertilizer costs tripled, and dry fertilizer costs —specifically phosphorus and potash — doubled since last year.
Fortunately, strong crop prices early this year have allowed us to offset some of the increased costs for the current growing season. However, many farmers could face significant losses next year if fertilizer prices don’t come down and the grain markets continue to erode, as they have started to do in recent weeks.
There are a lot of reasons behind this unsustainable jump in input costs, including inflation, energy prices, supply chain disruptions, trade practices and geopolitical disputes. Also, when one or two companies control 70% to 80% of the world supply of a particular product, as is the case for some fertilizers, it raises concerns about monopolistic practices.
While we are dealing with high prices on the farm, fertilizer companies are battling to keep fertilizer imports out of the country so they can limit competition.
Fortunately, a couple weeks ago, the International Trade Commission (ITC) rightfully denied a petition filed by CF Industries seeking import tariffs on urea ammonium nitrate (UAN) imports.
However, other fertilizer tariffs remain in place. For example, the ITC imposed duties last year on phosphorus imports from Morocco and Russia following a petition from Mosaic Co. claiming those countries unfairly subsidized phosphorus exports. Import tariffs like these disrupt trade and make it even more expensive for farmers to access much-needed fertilizer supplies.
That’s why, over the past few weeks, Farm Bureau has been engaging in discussions with other commodity groups and key players in the fertilizer industry.
Seeking reliefThere are a lot of ideas about the best way to provide relief from these soaring fertilizer prices.
As a policy-driven organization, Farm Bureau is working on your behalf to get better policies implemented that will provide both short-term relief and long-term stability in fertilizer markets. We need to address troublesome trade issues, including tariffs, and eliminate bureaucratic red tape that is keeping fertilizer companies from expanding production here in the United States.
Spurred by conversations that started here in Iowa, the American Farm Bureau Federation, along with the National Corn Growers Association and American Soybean Association, have delivered a letter to President Joe Biden expressing our deep concern about the fertilizer price crisis and offering some proposed ideas for relief.
The joint letter seeks executive action and a national state of emergency declaration to remove tariffs on fertilizer imports. There is precedent for such a move, as the Biden administration used a similar declaration to remove tariffs on solar panels earlier this year in the name of national security.
Farmers deserve similar treatment for fertilizer, which is critical to not only ensuring domestic and global food security but also plays an important and more significant role in national security. It’s important that we do all we can to ensure farmers have an open market to buy their fertilizer supplies at a fair price.
white house meetingLast week, I attended a meeting at the White House to follow up on this letter and further discuss our concerns on the issue. We agreed to keep the lines of communication open. We are hopeful the Biden administration will respond to the fertilizer crisis so our farmers can continue to effectively feed our country and the world.
Our efforts on this issue won’t stop there.
We’re going to continue to explore opportunities that will result in a more competitive and stable domestic fertilizer market. Building more domestic production is a crucial part of the solution so we don’t find ourselves in a similar situation in the future.
We will continue to engage in conversations with policy makers and industry representatives about the best path forward to reduce red tape, improve logistics and increase competition.
Farm Bureaus in other states are also ready to get involved to bolster these efforts. I’ve had several conversations with Farm Bureau presidents from across the United States, and they’re eager to join the push for solutions on this issue so that our members and all farmers can remain profitable in the future.
Johnson, a Calhoun County farmer, is president of the Iowa Farm Bureau Federation.
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