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New Economic Analysis Has Farmers Raising Concerns about Looming Tariffs on Nitrogen Fertilizers

January 14th, 2022
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New Economic Analysis Has Farmers Raising Concerns about Looming Tariffs on Nitrogen Fertilizers 

A new economic analysis released by researchers at Texas A&M University has corn producers raising concerns that pending tariffs on nitrogen fertilizers will create shortages and cause prices to increase even more for farmers, according to the National Corn Growers Association. 

“As part of this study, we conducted a historical analysis going back to 1980 and found that fertilizer costs tend to go up when corn revenues increase,” lead researcher Joe Outlaw, Ph.D., noted. “Notably, these prices tend to go up exponentially even after accounting for natural gas prices and higher demand.” 

The study notes that the price of one type of nitrogen fertilizer, called anhydrous ammonia, increased by $688 per ton – $86,000 for a 1,000-acre farm – from the end of 2020 through the end of October 2021. 

The study has farmers raising concerns about a petition by CF Industries, one of the country’s major nitrogen producers, with the U.S. International Trade Commission to impose tariffs on nitrogen fertilizers imported from Trinidad & Tobago and Russia. The U.S. Department of Commerce has since released a preliminary finding recommending tariffs, despite strong outcry from farm groups. 

“The proposed tariffs will create shortages and drive our costs up even higher,” Iowa farmer and National Corn Growers Association President Chris Edgington said. “They will add insult to injury and impose a financial hardship on family farms.” 

“This academic study verifies that nitrogen prices erode profitability for family farms,” Edgington said.

“Our request is simple,” he said. “We’re just asking that these companies keep us out of their trade disputes, and they do everything possible to keep their products available and affordable for family farms.” 

This increase has also been seen in Colorado. “Our farmers are facing record breaking fertilizer prices for this upcoming growing season. From a year ago January to now anhydrous ammonia increased in cost by 185% per ton on the open market,” said Jeremy Fix, President of the Colorado Corn Administrative Committee, “and the brunt of this increase will be borne by your local family farmers.” 

The study was commissioned by state corn organizations in Texas, Missouri, Colorado (Colorado Corn Administrative Committee), Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Michigan, Minnesota, Nebraska, New York, North Carolina, North Dakota, Ohio, South Carolina, South Dakota, Tennessee and Wisconsin. 

You can view the full study here: https://dt176nijwh14e.cloudfront.net/file/486/FINAL_Economic%20Impact%20of%20Nitrogen%20Markets%20on%20U%20HB-1%202.pdf 

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