You rarely go to the grocery store these days and hear no complaints about rising food prices. It may come as a surprise to learn that one of the main causes of high food prices is the scarcity and rising cost of fertilizers.
The farming community faces many challenges due to the Covid-19 pandemic – supply chain issues, labor shortages and inflation – but perhaps the greatest threat it faces is the rising cost of fertilizers, which has increased by up to 200% over the past year. .
According to a PSAC report from Texas A&M University, the average feed grain farm will pay $128,000 more for fertilizer in 2022.
So why are fertilizers so expensive?
The United States imposed tariffs on foreign fertilizer imports, eliminating competition for American companies such as The Mosaic Company. It’s not widely realized, but The Mosaic Company dominates the US fertilizer market and has about 90% of the US phosphate production market. The company pressures policymakers to adopt restrictive trade policies that further its own interests.
Indeed, tariffs on fertilizer imports from some of the largest fertilizer producers – Russia, Trinidad and Tobago and Morocco – have been put in place by the US Department of Commerce in response to requests trademarks of The Mosaic Company. These tariffs only seem to benefit this quasi-national monopoly and harm American consumers.
With foreign trading partners barred from entering the US market, the supply at an acceptable price does not meet the demand for fertilizer. Morocco holds more than 70% of the world’s phosphate reserves and supplies 60% of the fertilizers imported into the United States. The US Department of Commerce has imposed a 20% countervailing duty (CVD) on Moroccan imports of phosphate fertilizers.
The Commerce Department has also imposed CVDs on nitrogen fertilizers from Trinidad and Tobago, another major trading partner. The move comes at a time when nitrogen fertilizer prices have reached historic highs. In 2021, Trinidad and Tobago supplied 996,000 short tons of fertilizer to the United States.
Even before the Russian-Ukrainian conflict, in 2021, similar tariffs were imposed on imports of nitrogen fertilizers from Russia.
Brooke McMullin, Vice President of International Raw Materials LTD, explains the importance of the price of fertilizers on the cost of feed: “Of course, if the price of fertilizers increases, the cost of producing corn and all other crops dependent on these fertilizers is also increasing. , and these price increases are also borne by livestock farmers. Consumers, especially low-income families, are suffering. In fact, the entire food chain has been affected by the spike in fertilizer prices. fertilizer.
In response to this crisis, more than 80 members of Congress sent a letter to the US International Trade Commission calling for an end to these duties imposed on fertilizer imports. They argue that these tariffs make it difficult for American farmers to cope with the high costs of agricultural inputs: “Given the unprecedented volatility of recent years for farmers and ranchers, it is crucial that America avoids impose unnecessary duties that could further limit the fertilizer supply or increase its cost.
These duties have created unnecessary costs that hurt American farmers and, therefore, American consumers. The only party that seems to benefit from these restrictive trade policies is the gigantic Mosaic Company. Americans are already grappling with the effects of inflation and rising prices; it is imperative that our government enact policies that benefit the consumer and not the fertilizer lobby.
