Fischer Takes on Regulation, Input Costs in Fertilizer Industry

Introduces Nebraskan testifying before the committee

WASHINGTON - U.S. Senator Deb Fischer (R-NE), a member of the Senate Agriculture Committee, questioned agriculture leaders on regulatory challenges and input costs in the fertilizer industry.

Fischer introduced Joshua Westling, CEO of J. Westling & Co. in Omaha, NE, who testified before the Senate Agriculture Committee. Westling is developing a new fertilizer production facility in Gothenburg, NE. Fischer also questioned Corey Rosenbusch, President of the Fertilizer Institute, and Trent Kubic, President of the South Dakota Corn Growers.

Download video of Fischer's questioning here

Download audio of Fischer's questioning here

Fischer's questioning below:

FISCHER: I am pleased today to introduce Mr. Joshua Westling, who is here today as a witness before this committee on a very, very important subject. Mr. Westling is leading the development of Project Meadowlark, a new fertilizer plant in Gothenburg, Nebraska.

This facility is projected to produce 505,000 tons of liquid fertilizer and reach commercial operation, I'm afraid, not until 2029. But before working on Project Meadowlark, Mr. Westling led the development and construction of an anhydrous ammonia plant in Geneva, Nebraska, that became one of the few Greenfield Nitrogen fertilizer facilities built here in this country. Mr. Westling, we are so happy to see you here today, and I look forward to your comments.

Can you take just a minute to discuss the project that you are doing in Gothenburg and maybe highlight some of the challenges that you face

WESTLING: Thank you, Senator Fischer, for the question. The project that we're doing is to make a fertilizer type that's utilized in that region or geography in the state of Nebraska, born from the shortage that exists there and the difficulty of transporting product there over sometimes huge distances.

In terms of the challenges we've faced, like every large project that's not done by an incumbent or somebody with a big balance sheet, it's upfront capital and raising capital to get those projects off the ground. So, I'm fortunate and thankful for mostly farmers who stepped up to the plate to fund this project or to fund the early stages of the project.

FISCHER: We're hearing some discussions around federal investments. So, what types of safeguards do you believe should be put into place to ensure that new infrastructure projects that happen are not going to be resold, which Senator McConnell talked about that he was able to work on or contribute to consolidation, which is what I hear from producers. I'm sure you do out in the western part of the state too, hear from producers. They're worried about that consolidation, and what it does to price. Do you have any thoughts on that?

WESTLING: Senator Fischer, I'm certainly not an attorney, and I won't pretend to know how to write bills. I'll leave that to all of you who are much smarter than I am. But I would like to think that there is a way, through whatever form potential assistance comes in, for you to be able to create those exclusions or prohibitions from trading or consolidating or putting these types of projects in the hands of whomever you don't wish for them to be in.

FISCHER: Do you worry about regulations, federal regulations, local regulations? Have you had to deal with any of that?

WESTLING: Senator Fischer, we have had some regulations that we've had to deal with, not any different from most projects of this scale. We've been relatively fortunate in that in our state, the folks who are in charge of administering those regulations or enforcing those regulations have all been very reasonable to work with. And to the extent at the federal level where we needed them to weigh in, again, blessed by the fact that those folks have all been very reasonable to work with as well.

FISCHER: Mr. Rosenbusch, as many of my colleagues have shared, fertilizer availability and the prices are at the forefront of every farmer's mind across the country, and that includes my friends in Nebraska. For years, the United States has been reliant on foreign fertilizer production to meet that domestic demand.

With a lot of talk around the need to increase that domestic production, can you share the current regulatory challenges existing companies face when they tried to onboard a new fertilizer facility in the US?

ROSENBUSCH: It is really hard to build new capacity in this country. One recent ammonia plant took seven years to permit and over $25 million just to permit it, not even to start construction. We're talking four to five billion of capital. A phosphate mine took over a decade and $32 million just to permit. And that's all about the federal permitting process across multiple agencies.

When you think about actual production itself, once you get into production, the regulatory challenges that add costs to manufacturing, you've got phosphogypsum, which is a byproduct of phosphate fertilizer that has to be stacked and costs over a billion dollars a year just to maintain those stacks. There is a long list of regulations that we would be happy to share with you, of things that can be done to help bolster domestic supply.

FISCHER: Mr. Kubik, so nice to see you here. Can you take a minute to discuss the role that precision agriculture has, that new technology that's out there, and the increased approval we're seeing in the bio-based products can have in providing additional options to growers, to ag producers that are faced with the uncertainty they have now with fertilizer?

KUBIC: This is something I'm very, very passionate about coming out of college with an agronomy degree and always looking to better ourselves. And I think that could be said for all farmers. We're all trying to do what's best for the land, because we want our kids and our grandkids to farm in that land, and this fertilizer costs a lot, so we can't just throw it on and waste it and kind of hope it got there, right?

So, we're very precisely applying it. We're variable rate applying it, so parts of the field are getting more than others based on our soil testing to make sure we're doing everything exactly like we should. The biological space has definitely garnered a lot of attention over the past couple years with the increase in fertilizer. I'll be trying a couple different ones on my farm. I have tested multiple different ones on our farm.

The problem with that, unfortunately though Senator, we live in reality, and they're not enough right now to rely on. We still need fertilizer to grow our crops, and we're hopeful. I dream of a day where I don't need commercial fertilizer anymore. That'd be the best thing ever. But I don't know if my grandkids will experience that, but if we can put on less, put it on accurately, I think it does good for both sides.

This hearing was convened by the Senate Agriculture Committee and was titled "Perspectives on the Fertilizer Industry: Ensuring a Stable and Affordable Supply for American Producers."

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