The Phosphate Fiasco Ramps Up
An international fight over fertilizer is making waves.
The backstory: In July, U.S. fertilizer giant Mosaic Co. petitioned to the Department of Commerce that something hairy was going on in Russia and Morocco with phosphate prices. A glut of cheap, imported phosphate knocked domestic prices heavily over the past year. Even Nutrien, the world leader in fertilizer production, took an impairment charge on its earnings as the outlook on prices was ‘less than favorable.’
So Commerce folks obliged. Initial duties on Russian and Moroccan phosphate providers ranged from 20% to 72% — a bold move as 76% of phosphate imports were funneled from the two countries.
But the tides have turned: Noting Mosaic’s control of 70% of the U.S. phosphate market, the international foes are highlighting how a major lack of competition is not good for farmers.
Their campaign slogan: Mosaic’s getting greedy.
The North American wing of global fertilizer-maker OCP S.A. [Morocco-based] launched StandWithUSFarmers.com to gain signatures to send to Congress to fight the petition. The site advocates that U.S. producers have already seen a 25% spike in fertilizer costs since imports tumbled.
By the numbers: A former Chief Economist to American Farm Bureau did the math to show that U.S. farmers will see an additional $480-$640 million in fertilizer bills with duties in place. Eight Corn Belt Senators took note and are now pushing for the Mosaic petition to be trashed.
Where this goes: The Commerce Department is weighing a clash of interests. Do they ‘un-duty’ phosphate imports and avoid a Mosaic monopoly? Or do they investigate Mosaic’s claims further to gauge unfair international subsidies? This will be a barn burner.