High Country Times

The cost of synthetic fertilizer has surged by over 100% since 2021, creating significant issues in the agricultural sector. Farmers are grappling with this challenge which is driven primarily by a sharp increase in fossil fuel costs and industry consolidation.

"Skyrocketing prices for fertilizer have posed serious challenges to farmers," a scenario that has drawn the attention of legislators. Senator Thom Tillis along with his congressional colleagues have recently sent a joint letter to U.S. Department of Commerce (DOC) Secretary Gina Raimondo, urging for a revision in the calculation of countervailing duties (CVD) for phosphate fertilizers imported from Morocco, as reported on Thom Tillis Gov.

The lawmakers stressed on the financial burden these duties impose on farmers. "We urge the Commerce Department to diligently consider and adhere to the CIT's ruling when recalculating the subsidy amount, both in their final determination within the investigation and during the administrative review. Lowering the subsidy rate would provide much-needed relief to U.S. farm suppliers and their customers, American family farms," stated the legislators.

According to information provided by Senator Tillis, it is evident that the manner in which subsidies are calculated by DOC significantly impacts U.S. farmers. As projected, phosphate fertilizer demand will reach 7.4 million metric tons in 2023. With continuing exports by petitioners of an ongoing case, imports are needed to supply about 2.7 million metric tons of this total.

Furthermore, since imposing CVD on Moroccan phosphate fertilizers back in 2020, supply options have notably reduced for fulfilling U.S.'s phosphate needs. Saudi Arabia has become a key exporter supplying up to 66% of diammonium phosphate (DAP) imports and 25% of monoammonium phosphate (MAP) imports as they are not subject to any orders unlike others.

As per an article by The Conversation, corn growers seem to be worst hit. They contribute to half of the nitrogen fertilizer consumption in the U.S. The National Corn Growers Association has predicted that its members could face an 80% hike in synthetic fertilizer expenses this year compared to 2021. A recent study suggests an average of $128,000 increase in costs per farm.

The Biden administration introduced a new grant program on Mar. 11, 2022, targeting "supporting innovative American-made fertilizer to provide U.S. farmers with greater options in the market." The plan involves investing $500 million by the U.S. Department of Agriculture towards tackling rising fertilizer costs through enhanced production. But it remains unclear how the funds will be allocated as they may not suffice for constructing new fertilizer plants.