New analysis has farmers concerned about looming tariffs on fertilizers
A new economic analysis released by researchers at Texas A&M University has heightened tension among corn growers who fear pending tariffs on nitrogen fertilizers will create shortages and cause prices to increase even more for farmers.
While many growers are blaming natural gas prices and higher demand for the jump in prices, lead researcher Joe Outlaw says a historical analysis dating back to 1980 found that fertilizer costs tend to rise when corn revenues increase.
"These prices tend to go up exponentially even after accounting for natural gas prices and higher demand,” Outlaw said during a webinar hosted by the National Corn Growers Association.
The study notes that the price of one type of nitrogen fertilizer, called anhydrous ammonia, increased by $688 per ton – $86,000 for a 1,000-acre farm – from the end of 2020 through the end of October 2021.
“On our farm, we’re seeing prices three times higher than last year for our nitrogen fertilizer,” said Randy Poll, president of the Michigan Corn Growers Association. “In some instances, our suppliers are unable to guarantee that there will even be enough product available. These price increases are not sustainable for Michigan farmers.”
Despite a loud outcry from farm groups, U.S.-based CF Industries — a world leader in in nitrogen fertilizer and a major producer of phosphate fertilizers — with U.S. International Trade Commission is petitioning to impose tariffs on nitrogen fertilizers imported from Trinidad and Tobago and Russia.
“The proposed tariffs will create shortages and drive our costs up even higher,” Iowa farmer and National Corn Growers Association President Chris Edgington said. “They will add insult to injury and impose a financial hardship on family farms.”
This academic study verifies that nitrogen prices erode profitability for family farms, Edgington said.
“Our request is simple,” he said. “We’re just asking that these companies keep us out of their trade disputes, and they do everything possible to keep their products available and affordable for family farms.”
The study was commissioned by state corn organizations in Texas, Missouri, Colorado, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Michigan, Minnesota, Nebraska, New York, North Carolina, North Dakota, Ohio, South Carolina, South Dakota, Tennessee and Wisconsin.
Outlaw and Edgington and Poll made their remarks during a webinar hosted by the National Corn Growers Association.