The U.S. Department of Agriculture (USDA) recently announced that it will support additional fertilizer production for American farmers to address rising costs and spur competition.
USDA will make available $250 million through a new grant program this summer to support independent, innovative and sustainable American fertilizer production. Additionally, to address growing competition concerns in the agricultural supply chain, USDA will launch a public inquiry seeking information regarding seeds and agricultural inputs, fertilizer, and retail markets.
"Recent supply chain disruptions from the global pandemic to Putin's unprovoked war against Ukraine have shown just how important it is to invest in this crucial link in the agricultural supply chain here at home," said Agriculture Secretary Tom Vilsack. "The planned investment is one example of how USDA intends to bring production and jobs back to the United States and support American goods and services.”
In addition to the jobs, lower costs and more reliable supply, increased investment in the domestic fertilizer industry will help address climate change by reducing the greenhouse gas emissions associated with transportation, while also fostering more sustainable production methods and more precise application.
Fertilizer prices have more than doubled since last year due to many factors including the Russian invasion of Ukraine. Other factors contributing to the higher prices include a limited supply of the relevant minerals and high energy costs, high global demand and agricultural commodity prices, reliance on fertilizer imports, and lack of competition in the fertilizer industry.
The United States is a major importer and dependent on foreign fertilizer and is the second or third top importer for each of the three major components of fertilizer. The top producers of the major components of fertilizer include China, Russia, Canada and Morocco, with Belarus also providing a significant share of potash.
USDA will use funds from the Commodity Credit Corporation (CCC) set aside in September for market disruptions to develop a grant program that provides 'gap' financing to bring new, independent domestic production capacity on-line similar to the recently announced meat and poultry grants that are designed to promote competition and resilience in that sector.
The new program will support fertilizer production that is independent - outside the dominant fertilizer suppliers, increasing competition in a concentrated market; made in America - produced by domestic companies; innovative; sustainable; reduces the greenhouse gas impact of transportation, production, and use through renewable energy sources, feedstocks, formulations, and incentivizing greater precision in fertilizer use.
Details on the application process will be announced sometime this summer, with the first awards expected before the end of 2022.
Editor’s Take:
Perhaps this will help us achieve more independence from unreliable foreign suppliers. There are many moving pieces to the plan being promoted by USDA, but underlying it all is the desire to provide U.S. farmers with the necessary resources and technologies they need to increase production from fewer acres to feed an ever-expanding population. Not a small undertaking, but if we don’t start now, when? We applaud the initiative and trust it will be successful because the future of agriculture will depend on this type of innovation!
