Corn Growers Fight for Transparency, Competition in Fertilizer Market

Corn growers continue to raise alarms about high fertilizer costs, including during a hearing on fertilizer affordability today before the Senate Agriculture Committee.

"In August, South Dakota farmers will begin to seriously plan and make decisions regarding the 2027 corn crop, however it is nearly impossible for them to know what market conditions will look like at that time," South Dakota Corn Growers Association President Trent Kubik told the committee. "The majority of corn farmers are therefore concerned about fertilizer price and availability as they look forward."

Kubik was one of many corn grower representatives from across the country who flew in this week, during the middle of planting season, to share their perspective with members of Congress and advocate for the passage of the Fertilizer Transparency Act, which was introduced by Sens. John Thune (R-SD) and Amy Klobuchar (D-Minn.), and several other bills on the matter that are pending in Congress.

"Farmers are saddled with an economic situation that is unsustainable, with skyrocketing fertilizer prices coupled with corn prices that can't support those costs," said Matt Frostic, Michigan corn farmer and National Corn Growers Association (NCGA) first vice president, during a visit to Capitol Hill. "The fertilizer industry has become more consolidated, more concentrated, and more unworkable for farmers."

Kubik also addressed concentration of the fertilizer market during the hearing, noting that only a handful of domestic companies supply the U.S. market.

"Over the past 40 years, fewer and fewer fertilizer firms serve the U.S. farmer due in no small part to industry mergers," Kubik told the committee. "By almost any measure, these are highly concentrated markets."

The problem with fertilizer supply and costs worsened in 2020 after the Commerce Department, acting on a petition filed by Mosaic, a U.S.-based company, imposed duties on phosphate fertilizers imported from Morocco and Russia. Mosaic claimed at the time that unfairly subsidized foreign companies were flooding the U.S. market with fertilizers and selling the products at extremely low prices. The petition was supported by J.R. Simplot.

As a result of the decision, at least one Moroccan company halted shipments of phosphate fertilizers into the U.S., which led to record-high fertilizer prices that only abated slightly in subsequent years, only to be impacted again recently by events in the Middle East.

Meanwhile, in a further blow to farmers, Mosaic announced this week that it will scale back domestic production of phosphate fertilizer even as the company is still pushing for increasing duties on imports of Moroccan phosphate, and while they continue to deliver shareholder profitability.

The announcement spurred the ire of the National Corn Growers Association.

"The leaders at Mosaic continue to make one self-serving move after another, and always at the expense of the farmers who buy their products," Frostic said. "If Mosaic wants to cite financial challenges as a reason for needing to cut production, maybe it's time they finally recognize the stress they have put on farmers in recent years. The least they could do is call for an end to the duties on phosphate imports from Morocco."

Frostic said NCGA will continue to sound the alarms and push for congressional action until fertilizer prices come down.