Sens. Chuck Grassley (R-Iowa), Joni Ernst (R-Iowa), and Tammy Baldwin (D-Wisc.) are leading a bipartisan push to shed light on market factors driving the cost of fertilizer, which they estimate accounted for more than 30% of farmer input costs for the last growing season.
The Fertilizer Research Act of 2023 would require the USDA to conduct a study on competition and trends in the fertilizer market to determine their subsequent impacts on price. The senators plan to push to include the legislation in next year’s five-year farm bill reauthorization, though they are open to other paths for passage if opportunities arise.
“Farmers’ bottom lines thin as the price of fertilizer rises,” said Grassley. “With fertilizer being one of the ag industry’s highest input costs, it’s problematic [that] farmers have such a limited window into market fluctuations. Our bill will provide farmers in Iowa and across the Heartland with needed transparency and certainty as they navigate production costs.”
“Wisconsin’s farmers work long hours year-round to provide food for our families, but in recent years, they have faced tough economic headwinds, including the high cost of fertilizer,” added Baldwin. “This hurts their bottom lines, our rural communities, and American consumers, and we need to do more to address rising input costs for our agricultural industry.”
The bill, which was filed Dec. 12, is endorsed by the Iowa Corn Growers Association (ICGA) and Iowa Soybean Association.
“We appreciate that Senator Grassley has honored our request for a study to review the competition and transparency of the fertilizer industry,” said Jolene Riessen, ICGA President. “In recent years, the continued increase in input costs, especially fertilizer, has put pressure on Iowa’s corn farmers and our wallets. That’s why an assessment will provide clarity to better understand if there is adequate information on the pricing practices, tariffs, and exertion of market power by companies within the industry.”
Within one year of the bill’s passage, the Secretary of Agriculture, in consultation with the Economic Research Service, would be required to issue a report on USDA’s website regarding the US fertilizer industry. Specifically, the report would include:
- A description of impacts on the fertilizer market that influence price;
- Market trends in the past 25 years;
- A description of the imported fertilizer and market impacts;
- Impacts of anti-dumping and countervailing duties;
- A study of fertilizer industry concentration;
- A study of emerging fertilizer technologies; and
- A description of whether current public price reporting is sufficient for market transparency and whether the Secretary of Agriculture should establish a fertilizer reporting mechanism in which the fertilizer industry is required to report fertilizer prices at multiple levels of the supply chain on a daily, weekly, or monthly basis.
The Fertilizer Institute (TFI) said it supports transparency through improved data collection and analysis. The group also seeks the reestablishment of the position of Fertilizer Economist at the USDA to serve as a liaison between the agency and Congress on crop nutrient matters and also to develop reports on global supply, demand, and prices.
TFI noted that the
US has one of the most competitive fertilizer industries in the
world and is one of only three nations that has at least 20 unique companies
producing fertilizer products. It noted that many countries have only a single
producer or no domestic production at all.
TFI added that in 2022, the US held a 7.6% share of global fertilizer
production and 90% of
global fertilizer usage happens outside of the US. “The fertilizer market is
truly global and is impacted by geopolitical events, trade disruptions, supply
chain issues, weather, energy prices, and the natural ebb and flow of supply
and demand,” said the organization.
A spokesperson for top fertilizer maker Nutrien Ltd. said the company would review the legislation and declined further comment. Crop nutrient producers CF Industries Holdings Inc. and The Mosaic Co. didn’t immediately respond to requests for comment.
The push for a sweeping study of the fertilizer market follows
intense scrutiny of US meatpackers, as well as the Biden
administration stepping up its oversight of competition within the
seed industry.