US Department of Agriculture (USDA) secretary Brooke Rollins called elevated fertilizer costs "the current crisis of the day" on Thursday, but said multi-billion dollar funding will be allocated to ease agricultural market pressure soon, while also hinting at funding for potential new production facilities.
The US House Appropriations Committee hearing today focused on numerous issues facing farmers, such as general farmer affordability and farmland ownership, but Rollins was also prodded by Congress member Ashley Hinson (R-Iowa) to explain the USDA's efforts to promote competition and transparency in the fertilizer market.
Only a handful of companies control fertilizer input costs, and the fertilizer market is a "pending disaster" because of a lack of domestic competition, Rollins said. But the waiving of the Jones Act and lifting trade barriers to importing Venezuelan nitrogen are examples of how the current presidential administration is identifying short-term solutions while a long-term solution is still needed, she added.
Staff from the Commerce department, the USDA and the White House met on Wednesday with four top fertilizer suppliers, including two foreign producers, to discuss solutions to address pressures in the US fertilizer market, Rollins said.
The US needs to invest in fertilizer infrastructure and reshore production, but has also allocated "tens of billions of dollars" in funding from last year's import tariffs and trade renegotiations that will be deployed as early as next week, she said. The money will go towards building undisclosed projects that Rollins added would not come online for at least 12-18 months. Rollins also praised producer CF Industries for its decision to delay a planned ammonia turnaround at its Donaldsonville, Louisiana, facility, boosting nitrogen supply in the short-term to keep prices lower for US farmers.
But elevated fertilizer costs are not expected to be resolved soon. "We are on it, but I don't want to overpromise, these prices will not come down any time in the next couple of days or weeks, it may take us a couple of months to get them back down, but we're working on it," Rollins said.
Rollins, USDA deputy secretary Stephen Vaden and US president Donald Trump have all publicly taken aim at elevated fertilizer costs in recent months, assigning blame to domestic producers on social media and in interviews. But many domestic traders have vocalized that domestic and global producers are grappling with elevated feedstock costs that have worsened since the start of the US-Israel war with Iran that began on 28 February, with a large portion of all seaborne fertilizers unable to move freely as traffic at the strait of Hormuz remains limited.
