Prompted by reports that farmers are buying fertilizer directly from wholesale suppliers or producers instead of through traditional dealers, the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) last week reminded growers that they must store bulk fertilizer properly and may be required to pay tonnage fees used to support the state’s agricultural chemical cleanup program and fertilizer research.
Facing high retail prices this spring from fertilizer dealers with costly inventory they ordered back in 2008 when the markets were reaching historic highs, growers in the state have reportedly been searching out cheaper alternatives from other suppliers as wholesale replacement costs fall.
“We’ve heard of farmers driving to the Mississippi River to buy direct from the terminals where fertilizer prices are lower,” said Lori Bowman, agrichemical management bureau director with the DATCP. “We’ve also had instances where farmers have come into our office requesting a fertilizer dealer license based on a wholesaler’s recommendation.”
The department said it is also aware that groups of farmers are forming “buying clubs” where one member takes delivery of a large quantity of fertilizer, which is then distributed to other growers within the group. “Our two main concerns with having bulk fertilizer delivered directly to farms are fertilizer storage and tonnage credits,” Bowman said.
Wisconsin farmers, whether acting individually or in a so-called buying group, do not need a fertilizer license to receive bulk quantities of fertilizer, DATCP noted, nor is a license needed to distribute fertilizer that has been packaged or labeled by another licensed fertilizer dealer. DATCP cautioned, however, that a license is required if the fertilizer is blended or repackaged under a different name or label.
DATCP also stressed that the state’s fertilizer and pesticide bulk storage rules come into play for quantities of more than 55 gallons of liquid fertilizer or 100 pounds of dry fertilizer. These include the construction of a proper containment dike to hold any spills or leaks.
“If there is a fertilizer spill, be it a valve failure or a tank splitting open, the farmer will be responsible for reporting the spill and the clean up,” Bowman said. “Proper containment can prevent damage to the environment, but if you’re just dropping mini-bulks on your property or placing large quantities of urea in your shed on a dirt floor, you’re placing yourself at risk.”
Bowman also cautioned that the state is monitoring bulk transactions and following up with license holders to make sure that fertilizer tonnage fees are collected. The fees are paid to the state by one of the licensees within the chain of distribution, sometimes by the wholesaler and sometimes by the buyer, depending on the terms of the transaction.
“If a wholesaler is requiring a farmer to obtain a fertilizer license, the wholesaler may expect the farmer to pay the tonnage on the fertilizer, yet the farmer may not be aware of this requirement that comes with being a license holder,” Bowman said.
The state fertilizer tonnage fee is currently set at $1.06 per ton. Of that, 30 cents is applied as a basic fee, 20 cents goes to research, 10 cents to a groundwater fee, 2 cents to a weights and measures fee, and 44 cents to the Wisconsin Agriculture Cleanup Fund, according to Charlene Khazae, DATCP’s fertilizer program manager.