US farm group asks DOJ to investigate fertilizer prices
US agricultural research and policy nonprofit Family Farm Action Alliance (FFAA) has asked the Department of Justice to launch an antitrust investigation into higher fertilizer prices, citing concerns about squeezed profitability at the farm gate.
The FFAA in a letter said fertilizer producers "are using their monopoly power" to alter prices based on crop values instead of fertilizer supply and demand.
"If these corporations are tying the price of their products to the farmer's ability to pay rather than supply and demand, that equates to an abuse of the market," FFAA president Joe Maxell said in the group's letter to the Justice Department. "Such abuses allow concentrated corporations to extract maximum profit out of the supply chain, leaving the farmer with no hope of profitability."
The letter also said fertilizer companies cited global shortages to justify higher prices, arguing company documents "refute any claims and reveal they have additional capacity they are not utilizing".
Specific fertilizer companies named in the letter included Yara, CF Industries, Nutrien, Mosaic and Koch, none of which responded to a request for comment.
Key fertilizer prices in the US — such as Nola urea fob, Nola DAP fob and Nola MOP fob — have doubled or more than doubled since the start of the year amid surging feedstock costs, and planned and unplanned production outages domestically and globally.
The FFAA argued corn and soybean farmers had profit "stolen" because fertilizer values outpaced rising crop prices. The Federal Reserve Bank of Kansas City earlier this month said farm income in 2021 remained strong through the end of the year but higher input costs are "likely to increase credit needs and weigh on profit margins going forward".
But farmers are expected to post a profit in 2021 nonetheless.
Farmer income this year is forecast to increase by nearly 15pc from last season and reach the highest level since 2013, according to the US Department of Agriculture (USDA). Gross income from crop sales is expected to grow by 18pc year-over-year, more than offsetting the estimated 12pc increase in fertilizer expenditures.
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