US Department of Agriculture to support additional fertilizer production in US
The US Department of Agriculture (USDA) has announced it will support additional fertilizer production for American farmers to address rising costs, including the impact of the war in Ukraine and spur competition. USDA will make available US$250 million through a new grant programme this summer to support independent, innovative and sustainable American fertilizer production to supply American farmers.
Additionally, to address growing competition concerns in the agricultural supply chain, USDA will launch a public inquiry seeking information regarding seeds and agricultural inputs, fertilizer, and retail markets.
“Recent supply chain disruptions from the global pandemic to Putin’s unprovoked war against Ukraine have shown just how important it is to invest in this crucial link in the agricultural supply chain here at home,” said Agriculture Secretary Tom Vilsack, “The planned investment is one example of many Biden-Harris Administration initiatives to bring production and jobs back to the United States, promote competition, and support American goods and services. As the President said [at the State of the Union], we are working to rebuild the economy towards resilience, security, and sustainability, and this support to provide domestic, sustainable and independent choices for fertilizer supplies is part of that effort. In addition to the jobs, lower costs and more reliable supply, increased investment in the domestic fertilizer industry will help address climate change by reducing the greenhouse gas emissions associated with transportation, while also fostering more sustainable production methods and more precise application.”
Fertilizer prices have more than doubled since last year due to many factors including Putin’s price hike, a limited supply of the relevant minerals and high energy costs, high global demand and agricultural commodity prices, reliance on fertilizer imports and lack of competition in the fertilizer industry.
The US is a major importer and dependent on foreign fertilizer and is the second or third top importer for each of the three major components of fertilizer. The top producers of the major components of fertilizer include China, Russia, Canada and Morocco, with Belarus also providing a significant share of potash.
USDA will use funds from the Commodity Credit Corporation (CCC) set aside in September for market disruptions to develop a grant programme that provides ‘gap’ financing to bring new, independent domestic production capacity on-line—similar to the recently announced meat and poultry grants that are designed to promote competition and resilience in that sector.
The new programme will support fertilizer production that is:
- Independent – outside the dominant fertilizer suppliers, increasing competition in a concentrated market;
- Made in America – produced in the US by domestic companies, creating good-paying jobs at home and reducing the reliance on potentially unstable or inconsistent foreign supplies;
- Innovative –improve upon fertilizer production methods to jump start the next generation of fertilizers;
- Sustainable – reduces the greenhouse gas impact of transportation, production, and use through renewable energy sources, feedstocks, formulations, and incentivising greater precision in fertilizer use;
- Farmer-focused – like other CCC investments, a driving factor will be providing support and opportunities for US agriculture commodity producers.
Details on the application process will be announced in the summer of 2022, with the first awards expected before the end of 2022.
Michigan Potash & Salt Company, LLC (MPSC) founder and CEO Ted Pagano, commented: “In the face of a global food and fertilizer crisis, I applaud the USDA and Secretary of Agriculture Vilsack’s leadership in confronting our nation’s dependency on foreign fertilizer imports. Our farmers feed the world, yet they are wholly dependent on foreign sources of critical potash nutrients while domestic supplies are available right here at home. Michigan Potash stands ready to support American farmers by replacing one-to-one all the potash imported from Russia with domestic production from Michigan.”
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