Op-ed suggests removing tariffs on fertilizer imports to alleviate high fertilizer prices

06/09/2022 / By Ramon Tomey

An op-ed published in the Washington Examiner suggested that removing tariffs on fertilizers imported from other countries can help lower the cost of fertilizer for American farmers.

The June 7 op-ed penned by Kent Kaiser and Dave Juday cited the ongoing Russia-Ukraine war and the sanctions that seek to “restrict [Russia’s] export revenue” as one reason for the skyrocketing fertilizer prices.

“The pressure applied by sanctions effectively reduces the available supply of fertilizer on the global market,” they added.

“The U.S. has a robust fertilizer manufacturing sector, but the overall balance of global supply and demand affects prices here in the U.S. as well as in other countries,” wrote the two. Kaiser and Juday also quoted a March 2022 speech by President Joe Biden, who said: “The price of these sanctions is not just imposed upon Russia. It’s imposed upon an awful lot of countries as well, including European countries and [the United States].”

According to the two, Morocco and Trinidad and Tobago – key suppliers of fertilizers to the U.S. – have also suffered as a result of tariffs imposed by the federal government.

Back in November 2020, the Trump administration levied new tariffs on phosphate fertilizers from Morocco. The North African country is home to 70 percent of the world’s phosphate reserves, and is the No. 2 global exporter of phosphate fertilizers between China and Russia. The resulting duties left a measly 15 percent of the world’s phosphate fertilizer supply not subject to U.S. tariffs.

Also in that month, the Trump administration’s Department of Commerce (DOC) made a preliminary decision to impose tariffs on urea ammonium nitrate (UAN) fertilizers imported from Trinidad and Tobago. The tariffs commenced in July 2021, with the market factoring in the possible duties on fertilizer. The Biden administration is also considering additional tariffs on UAN from the Caribbean nation.

The resulting tariffs caused the prices of fertilizer to spike. The price of monoammonium phosphate fertilizer has increased by 125 percent since the duties were imposed, with 13 percent occurring as a result of the Russia-Ukraine war. UAN fertilizers such as anhydrous ammonia also saw a 273 percent increase in prices, with four percent occurring during the conflict. (Related: USA DOMESTIC food production now collapsing due to fertilizer costs, scarcity, diesel price inflation and food protectionism.)

Steady supply of fertilizers ensures food security

“America’s dominance as an agricultural producer and exporter cannot be maintained without sufficient access to imported fertilizer. What prices need now is swift and targeted action, not diversions into the structure of the industry or the #PutinPriceHike social media campaign by the White House,” wrote Kaiser and Juday.

The two echoed calls by lawmakers to reconsider the tariffs imposed on fertilizers from Morocco and Trinidad and Tobago. More than 80 members of Congress wrote to the International Trade Commission in March 2022, asking it to rescind the duties on the two countries. This, they explained, was “the most immediate opportunity for a near term, the partial remedy to the high costs of fertilizer facing U.S. farmers before the end of the 2022 planting season.”

The bipartisan group of lawmakers cited a recent forecast by the U.S. Department of Agriculture, which said farm production costs would increase by 6.6 percent from 2021 to this year. In line with this, the group remarked that farmers are seeing a spike in fertilizer prices “four to five times higher.”

Furthermore, the legislators indicated the negative consequences of the tariffs on fertilizers from Morocco and Trinidad and Tobago. The DOC’s move to levy duties on Moroccan phosphate fertilizer imports caused phosphate fertilizer prices to increase by 93 percent. Meanwhile, import volumes of Trinidadian UAN fertilizers dropped by 97 percent after the department began the imposition of tariffs.

“Given the last several years’ unprecedented volatility for farmers and ranchers, it is crucial America avoids imposing unnecessary duties that could further limit the fertilizer supply or raise its cost.”

Watch Marjorie Lou of “Buzz Behind the Veil” talking about fertilizer shortages below.

This video is from the Buzz Behind the Veil channel on Brighteon.com.