U.S. Farmers Report Concerns of Shortages, Crippling Prices Due to Tariffs on Fertilizers, NCGA and Other Ag Groups Tell U.S. Court of International Trade

November 1, 2021

U.S. Farmers Report Concerns of Shortages, Crippling Prices Due to Tariffs on Fertilizers, NCGA and Other Ag Groups Tell U.S. Court of International Trade

Nov 1, 2021

Key Issues:Trade

The National Corn Growers Association joined four other agricultural groups on Friday in encouraging the U.S. Court of International Trade to overturn an earlier decision by the International Trade Commission, which imposed tariffs on imported phosphate fertilizers from Morocco.

“Farmers are feeling the pain from these tariffs,” said Iowa farmer and NCGA President Chris Edgington. “We’re facing severe cost hikes on our fertilizers, and we are worried about fertilizer shortages next year. We desperately need the U.S. Court of International Trade to remedy this situation.” 

 

The U.S. Department of Commerce recommended in February 2021 that the ITC implement tariffs over 19% on imported fertilizers from Morocco after the Mosaic Company, which manufactures fertilizers used in the U.S. and abroad, filed a petition with the department seeking the levies. The ITC voted in March to impose the tariffs while adding similar levies on Russian imports.

As a result, critical sources of imported supply have been shut out of the U.S. market, and the costs for fertilizers have increased for farmers. In the meantime, Mosaic, whose control of the phosphate market has grown from 74% to over 80%, is gaining a near-monopoly over the phosphate fertilizer supply in the U.S. In fact, Mosaic’s share price has quadrupled since a March 2020 low.

“Farmers pay the price when input companies monopolize a market,” said Edgington. To get our job done and keep prices reasonable, we need quick access to fertilizers from multiple companies, including those outside the U.S.”

One of the arguments in the brief centers on a decision by Mosaic in 2017 to shutter two facilities, which caused a shortage of fertilizers for U.S. farmers in the 2018 planting season. As a result, farmers sought supplies from companies outside the U.S.

Fertilizer supply typically takes several months to work its way through the supply chain, the brief notes. In addition, unexpected weather patterns, such as abnormally high precipitation, can negatively impact demand for fertilizers, causing a mismatch between projected demand and actual purchases.  

“…farmers can only apply fertilizers during a finite window of the planting season,” the brief explains. If supply is not available during that window, fertilizer application must be delayed until some future window of opportunity. This places a premium on reliability of supply, leading suppliers to diversify sourcing.”  

Agricultural Retailers Association, American Soybean Association, the National Cotton Council and the National Sorghum Producers also signed the brief. The Iowa Corn Growers also weighed in with the ITC and Department of Commerce on this issue in late summer. A decision from the court could come in 2022.

.