The American Farm Bureau Federation is sounding the alarm over potential duties on fertilizer imports from Russia and Trinidad and Tobago, two major suppliers being investigated by the U.S. government over claims of market-distorting subsidies.
Any new U.S. duties on fertilizer from either country would raise the cost of farming, according to a new American Farm Bureau Federation analysis, which comes as the Commerce Department announced this week an investigation into allegations that the two countries are unfairly subsidizing their exports of urea ammonium nitrate solutions (UAN) – the most widely used materials for nitrogen fertilizer.
The U.S. International Trade Commission is already investigating claims by Illinois-based CF Industries that subsidized imports from Russia and Trinidad and Tobago are harming domestic fertilizer companies.
“Imports are an important part of the UAN supply to farmers,” AFBF economist Veronica Nigh says in the report. “The application of the duties requested by (CF Industries), potentially in effect for five years, with the possibility of extension, will result in a constricted supply and higher prices for farmers for years to come, which would have a major impact on planting decisions and production.”
Nigh tells Agri-Pulse that the published report will be the basis for Farm Bureau’s official comments to the ITC, and she stressed that AFBF hopes it will spur other farm groups to also submit feedback.
While the Farm Bureau is primarily concerned with the bottom line of farmers and assuring that they have access to adequate supplies of fertilizer at affordable prices, CF Industries and its subsidiaries are concerned with the company’s welfare.
“For too long, UAN producers in the United States, who are among the most efficient in the world, have competed on an uneven playing field due to dumped and unfairly subsidized imports from Russia and Trinidad,” said CF Industries President and CEO Tony Will said in a statement. “The duties we are seeking will restore fairness to our highly competitive industry and help ensure that American UAN producers remain a reliable source of fertilizers for American farmers for years to come.”
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But Russia and Trinidad and Tobago supply more than 80% of the UAN fertilizer imports that the U.S. ag sector depends on, and the stiff duties that CF Industries is asking for would drive up already-increasing fertilizer costs in the U.S., according to the Farm Bureau.
“Given that UAN solutions account for 43% of nitrogen fertilizers, and nitrogen accounts for 59% of total fertilizer use, that means about 25% of operating costs can be attributed to UAN solutions,” the Farm Bureau said in the analysis. “Certainly, farmers would feel a significant increase in UAN solution costs in their bottom line.”
The Farm Bureau points to data from the USDA’s Economic Research Service, showing that fertilizer prices in the U.S. have been rising for the last several years and are expected to rise again in 2022.
New tariffs on UAN imports would only make the key input even more expensive, the group warns.
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