OMAHA (DTN) -- Leaders of three state corn grower organizations are pressing President Donald Trump to take antitrust action against the fertilizer industry, arguing that rising fertilizer prices are undermining billions of dollars in federal assistance intended to help struggling farmers.
The presidents of the Iowa Corn Growers Association, the Ohio Corn & Wheat Growers Association and the Texas Corn Producers Association thanked Trump in their letter for the recent announcement of $8 billion in aid to help farmers pay for higher diesel costs during harvest. At the same time, the farmers warned that, "fertilizer prices and the lack of meaningful competition remain urgent concerns."
In their letter to Trump, farmer leaders argued that rising fertilizer prices are eroding the value of any ad hoc aid.
"At nearly every turn, the benefit of your efforts to help farmers has been lost to higher fertilizer costs."
The farm groups suggested the administration's aid announcements are followed by fertilizer price increases. The letter stated Iowa farmers have been quoted anhydrous ammonia prices that are $150 per ton higher than they were in mid-September.
DTN's weekly Retail Fertilizer Trends column reports that anhydrous ammonia prices last week on average were $149 higher than a year ago. From mid-September through mid-October, anhydrous prices rose an average of $42 a ton as well.
"Farmers are facing fertilizer costs that simply do not reflect a competitive marketplace," said Steve Kuiper, president of the Iowa Corn Growers Association. "When farmer relief programs are announced and fertilizer prices continue to climb, it raises serious questions about whether farmers are benefiting from a fair and functioning market. Corn farmers work hard to manage risk and control costs, but they need a transparent, competitive fertilizer market to stand a chance of being profitable. That's why we're urging the Administration to move forward with its investigation and ensure farmers have confidence that anticompetitive practices will be thoroughly examined."
The Trump administration also paused duties on phosphate imports, but the corn growers' letter to Trump said Ohio farmers have reported phosphate prices are only about $5 a ton lower than a year ago.
DTN's fertilizer price tracking, however, shows both diammonium phosphate (DAP) and monoammonium phosphate (MAP) prices remain higher than they were a year ago. At $937 a ton, DAP is about $15 a ton higher than a year ago. MAP is priced at $981 a ton, up about $49 a ton on average from a year ago.
"When fertilizer prices rise after relief is announced and barely move after duties are suspended, it points to market power that relief and duty suspensions alone cannot fix," the letter to Trump stated.
The letter also criticized the country's largest phosphate producer, Mosaic Co., for curtailing domestic production. Still, phosphate production globally has been disrupted by the high costs of sulfur, which started in March after the war with Iran began.
The corn growers cited Trump's executive order last December targeting price fixing and anticompetitive behavior in the food supply chain. The order directed the Justice Department and Federal Trade Commission to investigate potential violations of antitrust laws.
"Farmers are now looking for that work to produce results," the three corn-grower leaders wrote.
The FTC announced in May that the agency is investigating potential anticompetitive behavior in the fertilizer industry. FTC Chairman Andrew Ferguson told farmers at an event in Texas that he would need farmers' help if his agency were to bring a case against the industry.
The farmers called on the administration to support the FTC's case to bring an enforcement action against the fertilizer industry.
"We are not asking the FTC to resolve every problem at once or to rush into a resolution that leaves the underlying market power untouched," the letter stated. "We respect due process, and a public adjudication of the facts is how that process works. It needs to begin."
Also see "At Texas Gathering, FTC Announces Fertilizer Antitrust Investigation Amid Farmer Complaints" here: https://www.dtnpf.com/….
DTN Headline News
DTN Blogs & Forums
