On June 29, President Trump declared an emergency and temporarily suspended the duties that have kept phosphate fertilizer from Morocco off American fields. It was the right call, and farmers heading into fall application season should welcome it. The administration deserves credit for recognizing what the numbers have shown for years: tax the world’s largest supplier of a commodity American farmers cannot do without, and you raise the cost of growing food.
Now the job is to keep the momentum going and make that relief permanent.
Fertilizer is a globally traded commodity, with prices set by world production, demand and the cost of shipping from source to farm. U.S. farmers import all three primary macronutrients: nitrogen, potassium and phosphate. Domestic production does not meet American demand for any of the three; imports close the gap year after year. Phosphate is the most constrained, limited by natural deposits of phosphate rock. The top five producing countries account for 80 percent of global output, and Morocco alone holds nearly 70 percent of the world’s reserves. Before the duties, in 2019 and 2020, Morocco supplied 72 percent of U.S. phosphate fertilizer imports.
Morocco is the supplier the United States effectively priced out of its own market. The countervailing duties imposed trace to a 2020 petition by a single domestic producer against imports from Morocco and Russia. The regulatory clock is worth walking through, because it maps almost step by step onto the run-up in prices. The U.S. International Trade Commission opened its investigation in June 2020 and made a preliminary injury finding that August. Commerce made its preliminary subsidy finding in November 2020 and its final finding in February 2021. On March 11, 2021, the ITC voted 4 to 1 to move forward and Commerce issued the duty orders, with initial cash-deposit rates of roughly 20 percent on Morocco’s OCP and as high as 47 percent on Russian producers.
As the duties took shape at the turn of 2021, wholesale phosphate at New Orleans jumped: monoammonium phosphate fertilizer (MAP) traded as high as $550 per ton, up more than $130 in a single month, and diammonium phosphate (DAP) prices rose by more than $150 per ton. By September 2021, retail MAP hit $800 per ton, a level not seen since 2009 as inventories of fertilizer hit record lows. By spring 2022, DAP set an all-time record reaching more than $1,000 per ton. Other forces were at work, including higher natural gas costs, pandemic-era supply snarls, and Russia’s invasion of Ukraine. But the sequence is hard to miss: the U.S. removed its largest phosphate supplier just as demand and global pressures were building, tightening supply exactly when farmers needed it eased.
The bill landed on farmers. According to the Agricultural and Food Policy Center at Texas A&M University, the phosphate CVDs cost U.S. producers an estimated $6.9 billion on major crops alone from 2021 through 2025. A group of U.S. senators warned Commerce in 2023 that the duties had “exposed farmers to the risk of inadequate supply into the future.”
The Trump administration’s June proclamation is a welcome course correction, but by design it is temporary. The suspension runs for eight months, or until the emergency ends, whichever comes first. That covers the coming application season, though farmers plan and invest on longer horizons. A crop cycle does not fit inside a short-term window.
Fortunately, the fix is already in motion. The CVD orders are in their five-year sunset review, and the ITC has agreed to a full review of whether they should stay. Commerce can, and should, let them lapse. The administration’s own findings point the way: the June 29 proclamation acknowledges that U.S. domestic agriculture production cannot meet U.S. demand, after exports, and that expanding production capacity will take time. If that is true for the next eight months, and it is, it is true for the crop years beyond them.
Some in Congress prefer subsidies to expand domestic production, an idea carried over from the prior administration. But that ignores the supply side. Fertilizer is globally traded, and phosphate deposits sit far from American soil. No amount of grant money changes the geology.
As Sen. Charles Grassley put it at a recent Agriculture Committee hearing on the fertilizer industry, it would be better to end the CVDs and lower the price of phosphate than to keep them in place to generate government revenue. That is the most direct way to rebalance supply and demand and deliver lasting relief to the farmers who feed the country, and the world.
The administration took the hard first step on June 29. The logical, and lasting, next step is to end the phosphate duties for good.
Dave Juday is an agricultural economist and commodity market analyst, and the founder and principal of The Juday Group.
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