USDA to Invest in American Fertilizer Production

The USDA announced it will support developing additional fertilizer production in the U.S. to address rising costs and spur competition. The agency will make $250 million available this summer through a new grant program to support independent, innovative, and sustainable American fertilizer production to help supply American farmers.

To address growing concerns about competition in the agricultural supply chain, USDA will also launch a public inquiry seeking information regarding seeds and agricultural inputs, fertilizer, and retail markets. “Recent supply chain disruptions from COVID-19 to the war in Ukraine have shown us how important it is to invest in this crucial link in the agricultural supply chain here at home,” says Ag Secretary Tom Vilsack.

Fertilizer prices have more than doubled since last year due to many factors. The top producers of the major components in fertilizer include China, Russia, Canada, and Morocco. Belarus also provides a significant share of the world’s potash exports.

Speaking at the Commodity Classic in New Orleans, Vilsack said USDA is looking at “what we can do immediately; what we can do in the midterm; and what we can do in the long term” to offset the higher prices. The new grant program will jumpstart some new efforts to reduce fertilizer prices.

The secretary also touched on research to make fertilizer applications more efficient. He praised state attorneys general that are collectively looking into questions about fertilizer prices such as “whether or not all of the increases that we have had in this country” are legitimate. He added, “So we will continue to promote those questions being asked.”

In the new program, USDA will use funds from the Commodity Credit Corporation (CCC) set aside in September for market disruptions to develop a grant program that provides ‘gap’ financing to bring new, independent domestic production capacity on-line—similar to the recently announced meat and poultry grants that are designed to promote competition and resilience in that sector.

Details on the application process will be announced in the summer of 2022, with the first awards expected before the end of 2022.

“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 Secretary 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.”

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USDA/NAFB/DTN