US Department of Agriculture Deputy Secretary Stephen Vaden travelled to Ogden, Iowa, on 11 September to ask farmers for their own experiences of the fertilizer market, as the Federal Trade Commission investigates possible unfair pricing and anti-competitive conduct in an industry growers say leaves them with almost no one to shop around with.

The event, titled "Fed Up: Fertilizer Cartel Profits on Farmers' Backs", was hosted by the Iowa Corn Growers Association together with corn and wheat organisations from South Dakota, Illinois, Minnesota, Kansas, Missouri, Ohio and other states. Organisers are directing producers to the website SaveFamilyFarms.US, where evidence can be submitted anonymously because, Vaden said, farmers may be "reasonably worried about retaliation". One story can be explained away, he told the audience, "but if we've got 100 such stories from farmers all across this country, it becomes very difficult for even sophisticated lawyers to explain away such a large and broad-based phenomenon".

Would-be competitors described what they say they are up against. Linda Thrasher, co-founder of the farmer-formed Greenfield Nitrogen, said the company had spent 12 years trying to sign enough off-take agreements to open a 300,000-ton anhydrous ammonia plant and storage facility in Iowa, and that retailers and farmer co-operatives were reluctant to commit for fear of being "blackballed" by their main suppliers. Keith Busch, chief executive of the Canadian fertilizer trading and risk-management software company ClearCost, alleged that shipments had been held up in distribution to manage demand and that large companies had worked to "crater" prices around rivals trying to bring new product to market.

The Fertilizer Institute rejected the charge, saying prices reflect a "complex set" of factors including global production and demand, geopolitics, weather, trade patterns and government policy, and that "TFI members and all fertilizer companies compete fiercely with each other in a robust, global market". Steve Kuiper, president of the Iowa Corn Growers Association, called the current environment "dire" and "unlike anything we have seen since the '80s": with so few sellers, he said, "farmers are simply told the price, and you're forced to take it". The Save Family Farms campaign says Iowa farm bankruptcies are up 220 per cent year on year.

Alongside the investigation, USDA is trying to add domestic supply. It took part in ground-breaking ceremonies for two Louisiana fertilizer plants in late August — one, Vaden said, the first new phosphate plant built in the United States since 1984, the other expected to be the world's largest ammonia plant by nameplate capacity. The administration suspended countervailing duties on Moroccan phosphate imports in late June, and USDA has launched a US$500 million Fertilizer Investment and Expansion for Long-term Domestic Supply (FIELDS) programme to fund new or expanded production outside the industry's dominant suppliers.

Iowa Attorney General Brenna Bird urged growers to "gather that evidence", with or without their names attached. Vaden gave no date for a Justice Department case but said "it's coming", and that events such as this one bring it closer. "We all know something hasn't been right in the fertilizer market," he said. "We all know that it's not really a free market."

AGDAILY Reporters wrote the account, drawing on the Iowa Capital Dispatch's reporting of the event.

Photo: Lynn Betts, USDA Natural Resources Conservation Service / Wikimedia Commons (Public domain)

Source: AGDAILY