USDA, Attorney Generals Call on Economists to Study Soaring Fertilizer Costs
Fertilizer shortages and skyrocketing prices began their climb in January 2021, with urea and potash increasing by roughly 215%, liquid nitrogen by 290%, monoammonium phosphate (MAP) increasing by 171% and anhydrous ammonia reaching 315%, according to USDA’s Agricultural Marketing Services, Fertilizer
Iowa Attorney General Tom Miller—along with a handful of fellow state attorney generals—were approached by various agricultural associations who shared their concerns in rising agricultural costs in the 2022 growing season.
Lance Lillibridge, Iowa Corn Growers Association (ICGA) President says his team contacted numerous fertilizer companies last year but had not heard back for many months when they chose to reach out to Miller.
In a press release last Thursday, Miller detailed a fertilizer market economic summary will be carried out to determine whether the “increases can be explained by supply and demand.” He says his office is not aimed at locating antitrust at this time.
At the Agricultural Outlook Forum last Thursday, USDA Secretary Tom Vilsack hinted there may be more to the story:
“Farmers have faced rising input costs in recent years, including price increases in fuel, feed, seed, and fertilizer. While weather and other external factors have contributed to these rising costs, production limitations and concentration are a cause for concern,” says Vilsack. “I sincerely hope that no company out there, whether it's fertilizer or any other supply, that may be impacted by this will take an unfair advantage.”
Miller mirrored Vilsacks comments, saying the Texas A&M study shows increases in crop returns for farmers tend to coincide with even higher increases in fertilizer expenses. He says the data shows fertilizer companies are “taking advantage” of farm incomes to increase returns, but admits more information is needed to confirm any allegations.
Vilsack supports attorney generals search for answers. He says once the market studies are completed, “we may learn additional steps we can take.”
While the fertilizer price inquiry is completed at universities across the nation, Vilsack suggests producers mitigate rising input costs by “embracing” various programs like Conservation Reserve Program (CRP) or split-applied nitrogen, both offered by USDA.
As a producer, Lillibridge questions the benefit of Vilsack’s CRP and split-apply recommendations.
“When we talk about sustainable agriculture, its only sustainable if it’s profitable.” Says Lillibridge. “Using split-apply nitrogen and putting ground in CRP is not going to benefits the producer, especially not in a high price situation - that’s only going to push prices higher.”
Read more:
> Fertilizer Industry Reacts to Texas A&M Report on Product Prices
> How Today’s Fertilizer Prices Could Reshape the Industry
> 50% Surge in Fertilizer Prices Adds $128,000 in On-Farm Costs for 2022, Finds Texas A&M Study
