Q&A: Spotlight on Soaring Farm Input Costs

Q&A: Spotlight on Soaring Farm Input Costs

With U.S. Sen. Chuck Grassley

Q: Why did you hold a Judiciary Committee hearing to examine consolidation in the farm sector?

A: As the only grain farmer in the United States Senate, I'm honored to advocate on behalf of family farmers who are wrapping up the harvest season and looking ahead to next year's crop. Today U.S. farmers are feeling crushed with uncertainty as they make plans to purchase inputs and take out lines of credit to pay the bills and stay afloat. At my annual county meetings, local co-ops and in communications with my office, Iowa farmers tell me they're feeling pinched by matters out of their control, including high input costs, high borrowing costs and global trade uncertainty. I held the committee hearing to look under the hood of market concentration in the ag sector and examine how it drives up the cost of production for family farmers and impacts food security for American families. From fertilizer to seed and equipment manufacturing, agribusiness consolidation among global conglomerates calls for a robust effort to promote competition and strengthen transparency to protect the livelihoods of farmers and foster a resilient food production system.

America's farm families take on the risk, put in the work and feed our nation and much of the world. As Iowa's senior U.S. Senator, I'll continue working to address the root causes contributing to soaring prices for farm inputs to strengthen the viability of the family farm for generations to come. Empowering America's farmers to continue to do what they love and do what they do best will help strengthen rural communities and our nation's food security. I've led the charge in Congress to beef up enforcement of anticompetitive practices and led bipartisan scrutiny of agricultural mergers. Nearly a decade ago, I referred to the consolidation wave in agribusiness as a tsunami. Left unchecked, concentration can lead to exclusionary, anticompetitive practices that impact farmers and the food supply chain. For example, I'm pushing to inject more price transparency in the fertilizer industry. The U.S. Department of Agriculture (USDA) estimates fertilizer purchases will account for 36% of a corn grower's operating costs in 2025. My Fertilizer Research Act would require the USDA to conduct a study on competition and trends in the fertilizer market that impact price.

Q: What did you learn from testimony from the witnesses, including two Iowans?

A: Noah Coppess farms full-time in the Stanwood area of Cedar County. He also operates an ag retail business selling pesticides and fertilizer to area farmers. In his testimony, he said consolidation has significantly limited marketing opportunities for farmers, with four big meatpackers dominating beef, pork and poultry processing. He said mega-mergers in the chemical and seed markets have resulted in opaque pricing and choice restrictions when farmers make seed and fertilizer purchasing decisions. According to USDA reports, net farm income in Iowa fell 53% in 2024, from nearly $14.9 billion to $7 billion. Farmers don't have the luxury of raising the price for their crops when they sell them to pass on the higher cost of production. Declining farm income combined with soaring farm input costs explain why farmers are unable to make a profit on $4 corn and $10 soybeans.

John Latham runs a family-owned independent seed business in Franklin County started by his grandfather in 1947. Their customers across the Upper Midwest buy the company's corn, soybean and alfalfa seed. He testified independent businesses like theirs are going out of business because of the powerful and "predatory" anticompetitive practices of multi-national companies. He compared their business model to abusive practices by pharmaceutical companies that distort intellectual property laws to keep cheaper generic options off the market. As a result, he said independent companies, farmers and consumers suffer. He described a one-sided situation for independent companies who face financial penalties and restrictive rebates from the large operators with whom they must sign data-sharing agreements about their customers. He explained how technology royalties have surged by 40% to 80% in the last four years.

Iowa's economy depends on a strong ag economy that supports farm families and good-paying jobs in the seed, agrochemical, meat processing and manufacturing industries. I'll continue my legislative and oversight work to keep check on high input costs, including my push with the Trump administration to get rid of the Biden Phosphate Duties that effectively removed Moroccan phosphate as an option for U.S. farmers. I also appreciate the top antitrust enforcement officer at the Department of Justice attended my Senate hearing. In September, Assistant Attorney General Abigail Slater announced a partnership with the USDA to protect competition in ag markets to strengthen coordination between the federal agencies on behalf of American farmers.

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