The U.S. International Trade Commission is considering finalizing the process of slapping duties on key foreign sources of urea ammonium nitrate fertilizer, but three GOP lawmakers urged the agency Thursday to reverse course out of consideration for U.S. farmers, who are dealing with widespread inflation and supply chain disruptions.
The Commerce Department, after investigating claims by U.S. fertilizer producer CF industries, issued preliminary rulings in November and then February that Russia and Trinidad and Tobago were unfairly subsidizing UAN exports as well as selling the fertilizer into the U.S. at below market prices.
The rulings allowed Commerce to begin collecting cash deposits until the duties are finalized, which is expected to happen later this summer.
Republican Reps. Randy Feenstra of Iowa, Tracey Mann of Kansas and Austin Scott of Georgia, however, all pleaded the case for farmers at a virtual hearing Thursday. All three virtually ignored Russia, which is being vilified for its invasion of Ukraine, and concentrated on Trinidad and Tobago.
“I would not expect our great (fertilizer) manufacturers in the United States to compete directly against foreign governments who put their thumbs on the scale for their industries,” Feenstra said. “With that said, the options for farmers have dwindled. In my view, it has never been more important to consider the stark realities around supply, demand and inflation … to inform the impacts of imports from countries on the (U.S.) domestic market.”
Both Scott and Feenstra asked the ITC to consider Trinidad and Tobago separate from Russia and halt the agency’s consideration of duties on UAN imports from the Caribbean island off the coast of Venezuela.
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“I believe that the commission should consider providing temporary duty relief on fertilizer imports to provide the most immediate opportunity for a near-term partial remedy to the high costs of fertilizer facing farmers before the end of 2022,” Feenstra said.
The commission did not respond to the lawmakers' comments, but officials with CF Industries argued vigorously for the ITC to finalize its earlier rulings against Russia and Trinidad and Tobago.
If the ITC and Commerce do not finalize the duties, Russian and Trinidadian UAN imports will come flooding back in to the U.S., said CF Industries CEO Tony Will.
While that would be appreciated by U.S. farmers, CF Industries would suffer, said Will. Imports from the two countries halted even before the preliminary duties were put in place last year, but that trade could resume quickly.
“If this case goes away, large volumes of subsidized imports will return and I would expect U.S. margins to drop below those of urea,” Will said. “I would expect the U.S. domestic production … to shrink, making U.S. farmers permanently dependent on Russian UAN. Europe has become critically dependent on Russia for natural gas and that hasn’t worked out well for Europe.”
But the National Corn Growers Association is undeterred. Nebraska Corn Growers Association President Andy Jobman testified on behalf of NCGA, stressing that farmers are suffering from high prices and the situation can be alleviated by ending the duties.
“Fertilizer is one of our greatest inputs. Nitrogen fertilizers, including UAN, account for more than 50% of fertilizer expenses. Even before the tariffs went into effect in December of last year, we were paying more than 300% for UAN year-over-year,” Jobman said in testimony Thursday.
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