Tariffs on phosphate fertilizer is going to increase production costs, a farmer said
By Diego Flammini
U.S. cash crop producers are concerned with how a federal ruling could affect their operations.
The U.S. International Trade Commission ruled in February it would place tariffs on imports of phosphate fertilizer from Morocco and Russia.
Products from Moroccan company OCP will be charged a tariff of 19.97 percent. Phosphates from Russian companies PhosAgro and EuroChem will be subject to tariffs of 9.19 percent and 47.05 percent, respectively.
All other producers and exporters will face tariffs of 17.2 percent.
And these duties will be in place for five years.
American farmers are troubled by the ITC’s ruling because it means running a farm just became more expensive.
Producers may not notice the increases this year, but they will likely have sticker shock over the next few crop years, said Jeff Jorgenson, president of the Iowa Soybean Association.
“I bought a lot of our fertilizer in July and August of last year and the phosphate price now is almost double what it was then,” he told Farms.com. “When farmers start getting into August or September and they start thinking about what they’re going to apply I’m sure there’s going to be some head scratching going on about the price of fertilizer.”
Jorgenson paid between $315 and $400 per ton of fertilizer last year. The last numbers he heard were close to $700 per ton, he said.
The issue becomes simple. If phosphate prices remain high and futures markets aren’t favorable for crops, farmers will scale back production, Jorgenson said.
“At the end of the day, if fertilizer prices remain at these levels and markets aren’t higher than what they are now, we’ll just end up cutting back on how much we apply or how much we plant,” he said. “It becomes a simple matter of determining if what we’re spending will bring us back a return on our investment.”
Mosaic, a phosphate and potash mining company, asked the ITC to place these tariffs on Russia and Morocco.
Mosaic argued that imports from those two countries are unfairly subsidized by their governments.
"Mosaic, the U.S phosphate industry, and all American manufacturers who believe in free and fair trade appreciate the importance of today's ruling," Mosaic President and CEO Joc O'Rourke said in a statement. "The Commerce Department's hard work on this case brought us one step closer to ensuring American farmers can depend on high quality, competitive American fertilizer for decades to come."