Trade decision will raise fertilizer costs

A decision rendered March 11 by the U.S. International Trade Commission to slap an additional duty on phosphate fertilizer imported from Morocco and Russia will raise fertilizer costs for United States farmers an estimated $1.5 billion, according to a former American Farm Bureau economist.

The complaint against the imported phosphate was filed last June by a single company, The Mosaic Company based in Tampa, Florida, that alleged “material injury” from the phosphate imports from Morocco and Russia. A Fortune 500 company, Mosaic has more than 13,000 employees and sells fertilizer to more than 40 countries, according to its website.

Morocco holds the largest demonstrated phosphate reserves in the world, but actual production is led by China, with 110 million metric tons in 2019, according to Phosphate Investing News. A preliminary finding by the USITC last August found there were reasonable grounds for concluding the government-subsidized imports hurt the company, and therefore for imposing retaliatory duties that will last for at least five years.

In February, Mosaic praised the USITC’s findings on its website, saying, “Mosaic appreciates the importance of today’s ruling for the U.S. phosphate industry, and all American manufacturers who believe in free and fair trade.”

But also in February, Bob Young, former chief economist for the American Farm Bureau Federation and co-director of the Food and Agricultural Policy Research Institute, said in a letter to another publication that according to research by the Juday Group, the duties will result in higher fertilizer prices that will raise typical corn and wheat producers costs by more than $7 per acre and those of soybean farmers by $5 per acre. Assuming 210 million acres planted to those three crops suggests a cost increase of between $1 billion and $1.5 billion for these producers for the coming crop year, according to Young.

The full report, Phosphate Fertilizers from Morocco and Russia (Inv. Nos. 701-TA-650-651 (Final), USITC Publication 5172, March 2021) will be made available April 13 on the USITC’s website at http://pubapps.usitc.gov/applications/publogs/qry_publication_loglist.asp.

David Murray can be reached at [email protected].