Eight businesses are set to split $29 million to boost domestic fertilizer production capacity for projects that the Agriculture Department says will have a near-term impact on the 2023 and 2024 crop years.
Ag Secretary Tom Vilsack announced the projects – the first investments from the $500 million Fertilizer Production Expansion Program – in a speech Friday at the Commodity Classic in Orlando. Speaking to members of the National Corn Growers Association, American Soybean Association, National Association of Wheat Growers, National Sorghum Producers and the Association of Equipment Manufacturers, Vilsack outlined the goals of the program for the initial wave of grant recipients and beyond.
“Resources are going to be used to modernize equipment, to advance climate-smart practices, to build production operations and facilities, and to expand the capacity of fertilizer production in the United States,” he said.
The eight programs are spread across six states: Alabama, Colorado, Massachusetts, Ohio, Washington, and three projects in Missouri.
The largest FPEP grant is a $7.5 million allocation to Ostara St Louis LTD, which USDA says will “fund the fertilizer manufacturing site, which is in the late stages of project development, including construction, commissioning, and production ramp up of the site.” At capacity, the facility will be able to produce about 200,000 tons per year of phosphate fertilizer.
Other projects are all set to receive $5 million or less, including two projects topping $4.9 million.
Speaking to Agri-Pulse following the announcement, Vilsack said he expects projects in the “phase one” of the program – aimed at near-term capacity expansion – would account for about $90 million. All told, USDA received more than 350 FPEP applications and about $3 billion in funding requests. For now, Vilsack said the program – which has already grown from its original $250 million – is sticking at its authorized amount, but didn’t rule out possible expansion of its budget.
“I suppose if we're just blown away with the quality of all those (remaining) applications, somebody's going to come back to me and say, ‘Is there anything we can do?’” he said. “But at this point in time we have $500 million.”
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The investment was welcomed by ag groups, but several stakeholders have also pointed to the massive costs associated with fertilizer production expansion and wondered if spreading $500 million across the country will make a significant dent.
“It’s a capital-intensive industry; $1 to $4 billion to build a nitrogen plant, a phosphate mine that’s trying to expand has taken 10 years to get permitting and it’s cost over $30 million, so when you think about a $500 million program and where it’s going to impact actual supply for the farmer, it’s going to be a little bit of a limited impact,” Corey Rosenbusch, president and CEO of The Fertilizer Institute, told Agri-Pulse.
“With that said, we have a number of our member companies that are part of the announcement this morning and they’re really excited,” he added, noting many of the recipients are small- to medium-sized companies working on innovations in the space.
Tom Haag, president of the National Corn Growers Association, also noted the program would be beneficial for expanding domestic production but would be limited in its scope.
“It’s going to help, there’s no doubt about that,” he said. “It probably won’t be the full savior, but it’s better than nothing.”
Vilsack said he expects to award the remainder of the program’s funding yet this year, but he also noted processing the remaining applications and doing the necessary environmental reviews will take time.
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