The Agricultural Retailers Association (ARA), along with nearly 30 national, regional, and state agricultural organizations, is planning to send a letter in mid-May to House Ways and Means Committee Chairman Charles Rangel (D-N.Y.) and Ranking Member Jim McCrery (R-La.) urging their support for legislation sponsored by Rep. Marion Berry (D-Ark.) that would remove trade restrictions on urea and ammonium nitrate imports from Russia and Ukraine.
The letter refers to H.R.443 and H.R.445, which were introduced by Berry to end limitations on AN imports from the Russian Federation and to suspend antidumping duty orders on solid urea imports from Russia and Ukraine (GM July 31, 2006), as “much-needed bills” that would eliminate “obsolete antidumping duty orders and trade import restrictions.” The letter says these trade measures “no longer make sense” due to the changing dynamics in the U.S. marketplace.
“Today America’s farmers and ranchers are being hard hit by high fertilizer, fuel and transportation costs,” the letter states. Noting the projected acreage increases for corn, wheat, and sorghum in 2007, the letter says adequate supplies of fertilizer are needed “to meet the increased demand and to benefit farmers and ranchers with more affordable prices.”
The U.S. International Trade Commission (ITC) and the Department of Commerce voted in 2006 to continue the suspension agreement on Russian AN for another five years, stating that lifting it would likely cause material injury to the domestic AN industry because of imports being traded at below fair market value (GM March 20, 2006). In 2005, antidumping duty orders on urea from Russia and Ukraine were affirmed for the same reasons (GM Nov. 21, 2005).
The ITC is currently deciding whether the continuation of antidumping duty orders on AN imports from Ukraine for another five years would cause material injury to the domestic industry (GM April 23, p. 1). The DOC determined in December 2006 that revocation of the duties would likely lead to a continuation or recurrence of AN imports from that country selling at below fair market value in the U.S. (GM Jan. 1, p. 10).
The trade restrictions are strongly supported by the Ad Hoc Committee of Domestic Nitrogen Producers, whose urea-producing members include CF Industries Holdings Inc. and PCS Nitrogen Inc., and by the Committee for Fair Ammonium Nitrate Trade (COFANT), which represents domestic producers El Dorado Chemical Co., and Terra Industries Inc.
The letter from ARA and its coalition organizations, however, faults the “limited supply and rising prices” for these products due to closed or idled domestic manufacturing plants. “It is counterproductive to restrict the nation’s farmers’ and ranchers’ access to these imported plant nutrient products and, in the process, to block their opportunity to purchase more affordably-priced fertilizer products,” the letter says.
“With the significant reduction in domestic urea and ammonium nitrate fertilizer capacity, the U.S. marketplace will continue to face tight supply conditions and dramatic price increases,” the letter concludes. “Additional imports into the U.S. are necessary to meet current demand. Russia and Ukraine are two of the world’s largest producers of urea and ammonium nitrate fertilizer that can help alleviate the supply issue and make both fertilizer products more affordable for the nation’s farmers.”