A bipartisan group of 86 members of Congress sent a letter dated March 17 to Jason Kearns, the Chair of the U.S. International Trade Commission, asking that ITC remove phosphate tariffs from Morocco and suspend the current process and preliminary duties on UAN from Trinidad and Tobago.
The Congressmen said that the conditions surrounding on-farm expenses in the U.S. have dramatically changed since ITC initiated these investigations.
The Congressmen noted that USDA recently forecast that farm production expenses will increase by 6.6 percent from 2021, with several factors leading to increased expenses, including China’s curtailed fertilizer exports, a congested supply chain, increased demand, severe weather, COVID-19, and general inflationary pressures. They said farmers are seeing fertilizer prices four to five times higher than this time last year.
“Currently, only about 35 percent of the world’s traded supply of phosphate fertilizer is not subject to duties for import into the U.S,” said the group. “This has unnecessarily restricted supply and added costs. Historically, phosphate fertilizer accounts for 15 percent costs for producers. Since the U.S. Department of Commerce’s decision to impose duties on phosphate fertilizer imports from Morocco, phosphate fertilizer prices have increased 93 percent.”
The group said because there is a degree of substitution among nitrogen fertilizer, the impact of the tariffs on UAN is felt across all nitrogen products. It cited a recent predictive modeling study by Kansas State University’s Department of Agricultural Economics as indicating that ammonia prices should be around $1,000 per ton, with the actual price exceeding $1,500 per ton. It said that at the end of February, all fertilizer prices were near record high levels.
“Eliminating these duties on fertilizer imports provides the most immediate opportunity for a near term, partial remedy to the high costs of fertilizer facing U.S. farmers before the end of the 2022 planting season,” said the Congressmen. “Currently, in a time of tight global supply and demand for corn, soybeans, wheat, and other commodities, planting decisions are increasingly being made not on market fundamentals, but rather on the cost of production driven by the price and supply of fertilizer.”
“Removing duties levied on Moroccan phosphates would have the immediate impact of increased competition in the U.S. market and alleviate some supply concerns,” said Alexis Maxwell, Green Markets Director of Research.
As previously reported, the Emergency Relief from Duties Act has been filed in both the House and the Senate. It would create a pathway to create emergency waivers for duties placed on fertilizers by the ITC (GM March 18, p. 1). Another group of some 19 Republican members of Congress has sent a letter to President Biden urging him to take immediate action to lower the cost of fertilizer.