During a speech at the Commodity Classic, U.S. Secretary of Agriculture Tom Vilsack announced USDA will make available $250 million through a new grant program this summer to support independent, innovative and sustainable American fertilizer production to supply American farmers. Additionally, to address growing competition concerns in the agricultural supply chain, USDA will launch a public inquiry seeking information regarding seeds, agricultural inputs, fertilizer and retail markets.
USDA photo by Tom Witham
“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,” Vilsack said, “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.”
PRICES MORE THAN DOUBLED
Fertilizer prices have more than doubled since last year due to many factors including Putin’s price hike, 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 provide ‘gap financing to bring new, independent domestic production capacity on-line — like the recently announced meat and poultry grants that are designed to promote competition and resilience in that sector.
PROGRAM PRIORITIES
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 in the United States by domestic companies, creating good-paying jobs at home and reducing the reliance on potentially unstable or inconsistent foreign supplies;
- Innovative –improve upon fertilizer production methods to jump start the next generation of fertilizers;
- Sustainable – reduces the greenhouse gas impact of transportation, production, and use through renewable energy sources, feedstocks, formulations, and incentivizing greater precision in fertilizer use;
- Farmer-focused – like other Commodity Credit Corporation investments, a driving factor will be providing support and opportunities for U.S. agriculture commodity producers.
Details on the application process will be announced in the summer of 2022, with the first awards expected before the end of 2022.
