Agriculture and family farms and ranches are seeing unprecedented levels of oligopolies and monopolistic practices from input suppliers and in markets where we sell our products. Your organization has been fighting hard to draw attention to these challenges, along with potential solutions. 

In June, NDFU submitted comments to USDA on consolidation in the fertilizer industry, lack of competition in the seed industry, and lack of competition in food retail and distribution markets. Highlighted in italics is a portion of our comments:

Fertilizers, especially nitrogen, phosphorus, and potassium (potash), are critical agricultural inputs. High fertilizer prices harm family farmers and ranchers and can also impact consumers to the extent that higher input costs can result in increased food costs. 

[Our research, and that of others, also finds fertilizer prices and availability are impacted by the extremely high concentration of companies manufacturing or mining those products and inputs.] 

Fertilizer availability and high prices are major issues for farmers this spring. Retail fertilizer prices have reached record highs in 2022 for nitrogen, phosphorus, and potassium. Prices were already considerably higher in 2021 compared to the previous year, and they have continued to rise in 2022. Compared to 2021 prices, as of late April 2022, 10-34-0 is 48% more expensive, MAP is 54% higher, DAP is 68% more expensive, UAN28 is 81% higher, UAN32 is 87% more expensive, urea is 99% higher, potash is 103% higher and anhydrous is 117% more expensive. Higher crop prices are helping to offset the increased cost of fertilizer for American producers, but there is no guarantee that high crop prices will hold. 

Causes of current price increases include supply shocks from multiple causes, including the ripple effects of the COVID-19 pandemic, Russia’s invasion of Ukraine, weather events, other supply chain disruptions, and trade restrictions. Excessive market power and lack of competition in the fertilizer industry likely contributes to pricing and availability challenges as well. 

NDFU’s members have expressed several concerns regarding the high fertilizer prices. High costs of production and unfavorable planting conditions have forced many farmers to alter their cropping plans and seed selection. Furthermore, we anticipate prevented planting claims to be extremely high this crop year, lowering total fertilizer use across the state. However, many retailers are unable to cancel contracts for undelivered fertilizer with their suppliers. As a result, many farmers will be forced to apply highly priced fertilizers this fall or next season. This will not only elevate cost of production next growing season, but it also artificially inflates current demand for fertilizer. 

Despite convincing evidence of anticompetitive pricing of fertilizer and highly concentrated market structures, most antitrust authorities have shown scant interest in investigating the fertilizer industry. Public and private enforcement, and reconsideration of certain antitrust exemptions, may be warranted. 

To read more, go to the “Legislation” page at ndfu.org and click on “Federal Comments.” As a member of NDFU, we need you to continue the dialogue on these challenging consolidation issues.

— NDFU President Mark Watne