Senator Marshall: Kansas Farmers Need Competitive, Affordable Fertilizer Markets

Senator Marshall Questions Witnesses at the Senate Ag Committee

Washington - On Tuesday, U.S. Senator Roger Marshall, M.D. (R-Kansas), questioned witness Mr. Corey Rosenbusch, President and CEO of the Fertilizer Institute, at the Senate Agriculture Committee hearing. The hearing focused on the fertilizer industry and ways to ensure a stable and affordable supply for American producers.

Senator Marshall's focus was on rising fertilizer input costs, and his concerns over limited market competition and domestic supply constraints that he argued are contributing to higher costs for American farmers. He directly asked if the Fertilizer Institute supports removing the 16% countervailing duties on Moroccan phosphate, to which the CEO declined to answer.

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Highlights from the hearing include:

Senator Marshall: "Thank you so much, Chairman and Ranking Member, for your leadership on this as well. Thanks to the Working Families Tax Cuts, crop insurance and reference prices have been taken care of for the most part, but now input costs are the number one issue concerning American farmers. In fact, fertilizer costs now account up to 40% of input costs. That is now the number one issue. American farmers are price takers on both ends, paying monopoly prices for inputs they must buy, then accepting commodity prices they cannot control with no pricing power on either side. That's not a market. It's a trap for the American farmers. I do point out that prices for fertilizer were higher for some 18 months when Russia invaded Ukraine, and those prices came now, but of course, now they're up significantly. I'll speak to Mr. Rosenbush first. As you know, one particular company controls 64% of us, phosphate rock, mind, and they account for 90% of retail sales to farmers. It's being reported that this largest domestic supplier of phosphate is closing plants, which will reduce domestic supplies, while we have a 16% duty on Moroccan imports of phosphate. So, I guess the other question I would ask you is, what are these countervailing duties protecting? Aren't farmers now getting squeezed from both sides with less domestic supply and restricted imports?"

Mr. Rosenbusch: "Yeah. Thank you, Senator Marshall, for that question. And really, an interesting topic that I think is going to be the hot topic going forward into the future. I can't speak for a specific company's business decisions. And as you are aware, those are companies that are all TFI members on opposite sides of that case, so we remain neutral when it comes to that specific case."

Senator Marshall: "I'm not asking you to comment on their plan, but I think you would agree with me that the farmers are getting squeezed on both sides now that there's less domestic supply and restricted imports. Does the Fertilizer Institute support free market competition and fertilizer pricing? Yes or no? But if the answer is yes, you must justify the duties that block the world's largest phosphate producer from competing for American farmers' business."

Mr. Rosenbusch: "There's no question, Senator, that farmers are going through a really difficult economic time, and TFI does support policies that promote open, fair, predictable, and transparent trading environment."

Senator Marshall: "We understand all that. We understand there's a shortage of sulfur when you need the sulfur to mine the phosphate. That's pretty elementary chemistry. I'm just going to ask you directly, does the Fertilizer Institute support or oppose removing the 16% countervailing duties on Moroccan phosphate? The farmers in Kansas deserve an answer."

Mr. Rosenbusch: "Senator, I understand how challenging that is for farmers, because we have member companies that are both on both sides of that case. We do not take a position on that particular case at the ITC right now."

Senator Marshall: "American farmers paid almost $7 billion in excess costs over five years because of that 16% countervailing duty. Does the Fertilizer Institute believe American farmers should pay above market prices to protect a single company's market position?"

Mr. Rosenbusch: "Senator, we definitely believe that farmers need access, and if five member companies are committed to ensuring they have supply, and that that supply is in line with what global markets are. In many cases, we have seen that the US market is actually traded at a bit of a discount right now, almost $150 cheaper than what Brazil pays for their phosphates. And that commitment that I think the US fertilizer suppliers have been to the farmer to get an affordable and abundant supply of fertilizers."

Senator Marshall: "Would you agree that the American farmers deserve access to the lowest cost, highest quality fertilizers available regardless of where it's produced?"

Mr. Rosenbusch: "We 100% agree that fertilizer manufacturing and bolstering the domestic supply of fertilizer is incredibly important to deliver to us growers the fertilizer they need in order to be profitable."

Senator Marshall: "I just want to reiterate that the number one challenge with American farmers today is input cost. And fertilizers now account for up to 40% of those input costs. Look trade exports are up. We went from 2.3 to 2.8 billion bushels of corn last. Last year we had a 20% increase in corn and ethanol exports again this year, the problem is the input cost, and the fertilizer is the biggest chunk of those that we need to address. And I appreciate, again, the chairman and ranking member for giving us this opportunity to discuss these. We've been working on these again since Russia invaded Ukraine, and we need to give the American farmer some relief now, getting rid of those countervailing duties would be the quickest, most immediate impact that the American farmer could see in the real world today."

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