The USDA announced on March 11 that it will make available $250 million through a new grant program this summer to support independent, innovative, and sustainable American fertilizer production to supply American farmers. The grants will go to production outside the dominant fertilizer suppliers, so as to increase competition.
“Recent supply chain disruptions, from the global pandemic to Putin’s unprovoked war against Ukraine, have shown just how important it is to invest in this crucial link in the agricultural supply chain here at home,” said Agriculture Secretary Tom Vilsack. “The planned investment is one example of many Biden-Harris Administration initiatives to bring production and jobs back to the United States, promote competition, and support American goods and services.
“As the President said [at the State of the Union], we are working to rebuild the economy towards resilience, security, and sustainability, and this support to provide domestic, sustainable, and independent choices for fertilizer supplies is part of that effort,” he continued. “In addition to the jobs, lower costs, and more reliable supply, increased investment in the domestic fertilizer industry will help address climate change by reducing the greenhouse gas emissions associated with transportation, while also fostering more sustainable production methods and more precise application.”
Details on the application process will be announced in the summer of 2022, with the first awards expected before the end of 2022.
USDA said it will use funds from the Commodity Credit Corp. (CCC) set aside in September for market disruptions to develop a grant program that provides “gap” financing to bring new, independent domestic production capacity online – similar to the recently announced meat and poultry grants that are designed to promote competition and resilience in that sector.
In addition, to address growing competition concerns, USDA will launch a public inquiry seeking information regarding seeds and agricultural inputs, fertilizer, and retail markets.
USDA is requesting comments and information from the public about the impacts of concentration and market power in fertilizer, seeds and other agricultural inputs, and retail. With these Requests for Information (RFIs), USDA is also seeking information on competition and market access for farmers and ranchers, new and growing market competitors – especially small and medium-sized enterprises – and more about the context for these markets for farmers.
The inquiry stems from the July 9, 2021, Executive Order on “Promoting Competition in the American Economy,” which created a White House Competition Council and directed federal agency actions to enhance fairness and competition across America’s economy.
“Concentrated market structures and potentially anticompetitive practices leave America’s farmers, businesses, and consumers facing higher costs, fewer choices, and less control about where to buy and sell, and reduced innovation – ultimately making it harder for those who grow our food to survive,” said Vilsack. “As I talk to farmers, ranchers, and agriculture and food companies about the recent market challenges, I hear significant concerns about whether large companies along the supply chain are taking advantage of the situation by increasing profits – not just responding to supply and demand or passing along the costs.”
USDA will seek information specifically on Fertilizer; Seed, and agricultural inputs, in particular as they relate to the intellectual property system; and Retail, including access to retail through wholesale and distribution markets.
The comment period will be open for 60 days once the requests for information are published in the Federal Register, and upon which time comments can be submitted to www.regulations.gov. In the interim, the requests for information will be made available at www.ams.usda.gov/about-ams/fair-competitive/rfi.
USDA will use the comments received to develop reports mandated under the Competition E.O., and to develop policies relating to fair and competitive markets, supply chain resiliency, pandemic response, local and regional food systems, and other areas.
Subsequent actions may range from new grant and loan programs to additional rules and regulations under the Packers and Stockyards Act of 1921 and other relevant laws to increase fairness and competition in American agricultural markets.
The Fertilizer Institute (TFI) said on March 15 that it welcomes initiatives to strengthen domestic fertilizer production, including USDA’s $250 million grant program. However, it said it is important to recognize the innovative work undertaken by companies in the U.S. market, who have made a strong comeback from the days of high natural gas prices to leverage the shale gas revolution.
“We have a more robust U.S. fertilizer industry than we have seen in two decades,” said TFI. “By enacting policies that encourage safe, abundant, and affordable supplies of natural gas, which is the chief feedstock for nitrogen production, ensuring that permitting of production plants is streamlined and adding phosphate and potash to the Department of the Interior’s Critical Minerals list, policymakers can also support this vital industry.”
TFI also noted the fertilizer industry’s investment in innovation has been longstanding. Most recently, TFI partnered with USDA, EPA, and other stakeholders on the Next Gen Fertilizer Challenges (https://www.epa.gov/innovation/next-gen-fertilizer-challenges). It said the challenges aim to accelerate the development of innovative fertilizer product technologies and increase the use of existing enhanced efficiency fertilizers (EEFs) that maintain or increase crop yields and reduce environmental impacts to air, land, and water.
TFI said it looks forward to providing USDA with data for its RFI. It said when compared to peer sectors around the world, the U.S. fertilizer industry is among the most competitive and environmentally advanced.