Fertilizer producers Mosaic and Simplot say they support keeping countervailing duties on Moroccan and Russian phosphate fertilizer in the five-year review now underway.
The tariffs on both countries’ product, which range from 16.6% to more than 47%, have been in place since 2021 after Mosaic filed a countervailing duty case. The duties are up for a five-year sunset review, in which Commerce's International Trade Administration and the International Trade Commission assess whether they are still warranted.
If the domestic industry had said it no longer needs them to prevent injury, the tariffs would have been lifted.
Ag groups had been urging both companies to drop their support for the duties in the hope that removing them would help stabilize fertilizer prices in the wake of supply chain disruptions in the Strait of Hormuz.
Nutrien, a major North American fertilizer producer, has already said it would support lifting the duties, which were imposed to offset government support for Morocco’s OCP and Russian fertilizer producers.
In filings with the Commerce Department, however, both Mosaic and Simplot indicated they will push to keep the tariffs in place, noting that both countries continue to subsidize their fertilizer industries.
“Simplot intends to participate and support the continuation of the countervailing duty order,” filings from Simplot read. “Given the legal standard and the existing record of subsidies to the subject merchandise, an affirmative determination is plainly warranted.”
The companies are pushing the Commerce Department to increase the countervailing duty rates applied to both countries' producers. Morocco’s OCP, the companies argue, should face a 20.04% countervailing duty rate, up from 16.6% today. Russia’s Industrial Group Phosphate and JSC Apatit should face rates of 50.61% and 41.15% respectively, the two companies argued, up from 23.77% and 18.21% today.
In its own submission, the Kingdom of Morocco argued that Commerce should scrap the duties. It said that the government has ended a tax incentive program for exporters, and a loan guarantee program. Further, Commerce has changed the way it assesses mining rights as subsidies and the new methodology should return a zero subsidy rate, Morocco’s filing argues.
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Mosaic is the largest U.S. phosphate fertilizer producer and is responsible for more than half of U.S. production. Simplot, meanwhile, accounts for around 10% of domestic production.
Since the conflict in Iran broke out, diammonium phosphate prices have ticked up slightly, but have not seen the sharp price spikes observed in ammonia and urea markets.
Neil Caskey, CEO of the National Corn Growers Association, told Agri-Pulse that to see Mosaic and Simplot defend these duties is "astounding."
"We're stunned by it," Caskey said. "We are heading into the field to plant what will be the most expensive crop in history. And that was going to be true before the war with Iran, and that's even more so now."
Caskey said the ag groups never received a response from either firm to their letter last month.
"Obviously, they are both highly profitable companies that are doing extremely well. That's even more true right now because of the disruption from the war in Iran," Caskey added. "Their farm customers are in exactly the opposite position. They are fighting to stay in business with every day that passes."
The administration has made several efforts to ease fertilizer prices since the beginning of the conflict, including by waiving domestic shipping requirements and lifting restrictions on purchasing fertilizer from Venezuela. It has also been exploring additional policy actions, including using emergency powers to lift the countervailing duties on phosphate, according to people familiar with the situation.
But Caskey noted that getting Mosaic and Simplot to drop their support for the duties would have been the fastest way to get the duties removed.
"These are two companies that, to me, know no shame, and are just acting with complete disrespect to the American corn farmer," Caskey added.
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