A recent decision by the U.S. Department of Commerce to significantly lower duties placed on phosphate fertilizers imported from Morocco has the potential to provide true savings to farmers while giving them access to crucial inputs that have been scarce over the last couple years, according to a recent analysis by the National Corn Growers Association. The decision comes after an intense advocacy effort by state and national corn grower associations.
Commerce decided in November to reduce rates on the imports from 19.97% to 2.12%. While that decision covers duties from Nov. 30, 2020 to Dec. 31, 2021, it could still be an incentive for OCP, the Moroccan company that manufactures the products, to reenter the U.S. market.
Growers say it is a big step in the right direction.
“The decision is very meaningful to us,” said Harold Wolle, Minnesota farmer and NCGA President. “Farmers were already facing rate hikes on inputs and the duties were making the situation worse. This decision gives us a lot of hope.”
Commerce’s decision stems from an annual administrative review of the duties it imposes. The agency is again set to consider the rate on the same duties on Dec. 13. That review was ordered by the U.S. Court of International Trade after receiving a complaint filed by OCP.
Assuming Commerce finalizes the duty rates in that case and imports resume, farmers could see a reduction in added cost of $7 per acre on imported fertilizer from Morocco, according to NCGA’s analysis. Many factors and dynamics contribute to changes in fertilizer markets and prices, but the imposed duty rates undoubtedly had an impact on the prices paid by farmers.
Rewind to two years ago, say advocates, and the situation looked far more dire. Not only had The Mosaic Company managed to convince Commerce to place duties on phosphate fertilizers from Morocco, but CF Industries had also filed a petition with the same agency calling for duties on urea ammonium nitrate solution imported from Russia and Trinidad & Tobago.
The situation was creating havoc for corn growers and a plan was soon hatched by NCGA and state corn grower groups to launch a campaign that would push back on the tariffs.
“We appealed to Congress, the administration and directly to Commerce,” Wolle said. “We had high-profile policymakers writing letters. We worked with the press, and we had farmers providing direct testimony on how the duties were hurting them, their farms and the rural communities. It was a fierce and sustained advocacy effort that was heard all over Washington, D.C.”
Going back to late 2021, Ohio Corn & Wheat Growers were involved in the push for action regarding the fertilizer prices, signing on to a letter to Mosaic highlighting the stranglehold Mosaic has placed on its customers and suggested the company’s monopoly is creating serious problems for farmers.
“…only 15% of phosphorous imports now come into the U.S. without tariffs,” the letter said. “And experts say that using Commerce and ITC to manipulate the supply curve does indeed dictate price to farmers.”
The efforts paid off. In mid-2022, Commerce ruled against CF Industries’ petition to impose tariffs on nitrogen fertilizers imported from Russia and Trinidad and Tobago. That was more than a year before Commerce would make its decision on phosphate fertilizer imports.
“This type of stellar advocacy campaign would not have been possible if not for the help our members,” Wolle said. “They raised their voices and decision-makers listened. It shows the power of membership in organizations like NCGA who exist to support the American farmer.”