A coalition of 65 state and national agricultural organizations, including the National Corn Growers Association (NCGA), is calling on Commerce Secretary Howard Lutnick to eliminate countervailing duties on phosphate fertilizers imported from Morocco, arguing the tariffs have contributed to rising production costs for farmers.
The groups outlined their concerns in a letter sent to the Commerce Department, citing the financial challenges facing U.S. farmers as fertilizer prices remain elevated and farm profitability continues to decline.
“These costs land on an already fragile farm economy,” the letter said. “Net farm income has fallen roughly 31% from its 2022 peak, fertilizer prices are up more than 150% since 2020 and Chapter 12 farm bankruptcies have surged to their highest levels in several years.”
The request comes days after Federal Trade Commission Chairman Andrew Ferguson announced a broad investigation into fertilizer industry pricing practices and market concentration.
The groups contend that the countervailing duties worsen financial pressures on producers and could affect the long-term viability of family farming operations. They argue the duties, which were requested by Mosaic Co. and Simplot and have been in place since March 2021, have not achieved their intended purpose.
According to the letter, the tariffs do not protect a vulnerable domestic industry, instead benefitting companies that already hold dominant positions in the domestic phosphate fertilizer market.
The organizations cited an independent analysis by the Agricultural and Food Policy Center at Texas A&M University estimating that duties on Moroccan phosphate fertilizers increased input costs by about $6.9 billion for producers of corn, soybeans, wheat, rice, sorghum and cotton between the 2021 and 2025 growing seasons.
The analysis found that the original 19.97% duty rate increased U.S. diammonium phosphate prices by an estimated 28.6%.
The letter also criticized Mosaic's production decisions, arguing that domestic supply has not been strengthened by the duties.
“Far from safeguarding domestic supply, Mosaic continues to curtail its own production, even as supply tightened at home,” the letter noted. “These duties fail to do more than drive up costs for farmers and risk our national food security by limiting the large majority of our annual phosphate needs to a single supplier that continues to curtail production – enhancing our risks to supply chain disruptions.”
The organizations warned that relying heavily on a limited number of suppliers could increase the risk of future supply disruptions and affect U.S. food production.
NCGA said it has established an input task force to examine the causes of rising supply costs and identify potential solutions for farmers. The task force is evaluating factors contributing to higher prices for agricultural inputs and exploring ways to improve affordability and market competition.
The full letter can be read here.
Source: National Corn Growers Association, "Agricultural Groups Call for End to Countervailing Duties on Phosphate Fertilizers"