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Schutte: Farmers Face Inflated Fertilizer Costs
Missouri Ag Connection - 01/13/2022

Missouri Corn Growers Association (MCGA) President Jay Schutte of Benton City joined the National Corn Growers Association press conference Wednesday to discuss growing concern over pending tariffs on nitrogen fertilizers. This comes following a new economic analysis released by researchers at Texas A&M University that determined increases in fertilizer costs are attributable to increases in corn revenues. In addition, the research quantified natural gas, a key component in nitrogen fertilizer, only accounts for 15% of the variable costs.

The economic analysis is sounding the alarm over the increased costs, which could be compounded by a petition filed by CF Industries with the U.S. International Trade Commission to impose tariffs on nitrogen fertilizers imported from Trinidad & Tobago and Russia.

According to Schutte:

"In 2021, the cost of anhydrous ammonia [nitrogen fertilizer] at our local retailer in Audrain County was $488 per ton. This fall, the price was $1,282, an increase of 168%. The price for spring application is $1,480. According to today's study, the proposed tariffs would increase costs by $102 per ton, adding further insult to injury.

"On the surface, the increased cost per acre attributed solely to the countervailing duty on nitrogen may appear minimal. But the reality is there is more to the story. Once that countervailing duty is put in place, that helps garner additional market share and therefore market control, allowing companies to implement price control measures like we are seeing today.

"Today's food supply chain is a delicate system. This is not the time to add a disruptive force to protect a company already dominating the market at the expense of American farmers and American consumers."

The study was commissioned by state corn organizations in Missouri, Texas, Colorado, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Michigan, Minnesota, Nebraska, New York, North Carolina, North Dakota, Ohio, South Carolina, South Dakota, Tennessee, and Wisconsin.

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