Tag: Fertilizer

Farmers will soon face a harsh reality when it comes to fertilizer availability and cost. China, the top exporter of phosphate, is banning exports of the major fertilizer component through 2022. Fewer supplies spell higher prices for farmers.

Not Phunny: China’s government has started limiting production of phosphate due to climate emission concerns. They’re also banning exports so they can supply their own farmers the product. The thing about China and phosphate is they produce nearly 30% of the world’s trade.

Here comes the Black Swan: Several factors continue to wreak havoc on prices and availability for fertilizer, including Hurricane Ida, which impacted production in the Delta. Then there’s COVID-19 supply chain issues and increasing shipping costs and energy prices.

Fertilizer prices have increased from 2020 already—U.S. farmers spent around $119 per acre for corn in 2020, which is up from $115.86. And prices of urea, diammonium phosphate (DAP), monoammonium phosphate (MAP) and potash are up 59% or more from 2020. The news from China will not help that trajectory.

Phinding Phosphate: A field crop specialist for Michigan Farm Bureau says farmers should talk to their fertilizer retailers sooner rather than later to figure out what they’ll do in the 2022 growing season. The issues in supply could mean a possibility of inadequate fertilizer for the 91M acres of corn expected for 2022.

The American Farm Bureau is waving a red flag on a fertilizer fiasco that could drain U.S. farmers’ piggy banks.

The culprit? Potential duties on urea ammonium nitrate solutions (UAN).

In early July, CF Holdings, Inc. filed petitions with the U.S. government requesting countervailing and antidumping duty investigations of UAN imports from Russia and Trinidad and Tobago. The duties intend to offset the value of dumping — aka exporters selling in the U.S. at a below-normal value price — and countervailing subsidies.

CF Holdings, the U.S.’s largest UAN producer, claims the countries haven’t been fighting fair, underpricing their product by as much as 433.37%.

The more you know: More than 80% of American UAN fertilizer imports come from Russia and Trinidad and Tobago.

Bad news for the bottom line: Farm Bureau says UAN solutions are the most common nitrogen delivery vehicle, making up nearly half of nitrogen fertilizer usage. 59% of all fertilizer applied to fields is nitrogen. Roughly 25% of operating costs are attributable to UAN solutions… meaning these duties could do major damage to farmers’ bottom lines.

Insult to injury. Fertilizer costs were already projected to increase by roughly 5% between 2021 and 2022. The potential tariffs could make that a double-digit increase.

Michigan Potash and Salt Co. (MPSC) in Evart, Michigan will harvest Borgen Bed (rock) 1.5 miles below the surface for the purest potash born in the USA.

What’s the big deal? Potash is a crucial fertilizer rich in potassium. The U.S. Department of the Interior added it to the critical mineral list in 2018 because it’s an essential commodity for our nation’s economy and food security.

Oh, and this… Today, 96% of potash for American farms is imported primarily from a combination of Canada, Russia, and Belarus.

Less dependence on foreign potash is key. “One of the world’s largest Canadian producers has materially reduced its supply while the pending sanctions on Belarus may further threaten the global food supply chain,” said Theodore Pagano, Founder and CEO of MPSC.

He continued, “Potash prices have doubled in the past year, putting pressure on American farmers and a spotlight on national food security.”

The MPSC site will be the first new potash plant in the U.S. in 30 years, and the largest in the country, providing 10% of our nation’s supply. Currently, the largest plants are in New Mexico and Utah.

Timeline: Construction on the MPSC plant is slated to begin this fall and will take three years, employing 300 union workers. Mineral rights have already been leased from 450 families.

When MPSC opens in 2024 it will employ 150 full-time employees, while producing 650,000 tons of potash and more than one million tons of food-grade salt. That’s a lot of salt shakers.