Strong commodity prices and tight grain stocks are likely to keep pressure on fertilizer prices for some time to come, a representative of the industry told the House Agriculture Committee on Tuesday.
Corey Rosenbusch, president and CEO of The Fertilizer Institute, said fertilizer costs softened in recent months as growers held off buying supplies to get the “lowest possible price.”
“But when you just think about the fundamentals of supply and demand and where we are with crop prices, I think we will actually see things evolve as we go into spring and the rest of the year,” he told Rep. Don Davis, D-N.C.
Rosenbusch’s comments came during a wide-ranging hearing on agricultural production costs and regulatory concerns.
An industry analyst at USDA’s annual Agricultural Outlook Forum last week also suggested fertilizer prices could potentially turn around.
Laura Cross, director of the International Fertilizer Association’s Market Intelligence Service, said fertilizer prices had “pretty consistently declined” since the middle of 2022 but “we’re not out of the woods yet.”
Corey Rosenbusch, TFISeveral lawmakers pressed Rosenbusch on what it would take to increase domestic production. He suggested the Biden administration’s $500 million fertilizer development assistance program would have a muted impact, noting it can cost up to $4 billion to build a new manufacturing plant.
Rosenbusch urged the committee members to consider introducing a House version of Kansas GOP Sen. Roger Marshall’s Fertilizer SUSTAIN Act. Among other things, the legislation would designate potash and phosphate as critical minerals and reform permitting regulations tied to the National Environmental Policy Act. The critical minerals designation also would streamline permitting processes.
“The key is we have got to have that regulatory certainty, so that we can make those investments in these capital-intensive facilities,” Rosenbusch said.
When Rep. Derrick Van Orden, R-Wis., raised the possibility of creating a larger federal role in building domestic fertilizer production capacity, Rosenbusch responded, “I think our companies are adequately equipped to make those investments. I don't know that we need to nationalize fertilizer manufacturing.”
Members of the committee and representatives of industry groups who testified at the hearing also raised concerns about issues such as the Biden administration’s “waters of the U.S.” rule; the EPA’s ban on the use of chlorpyrifos insecticide on food crops; and the Securities and Exchange Commission’s proposal to require publicly traded companies to track and disclose the greenhouse gas emissions in their supply chains.
Rob Larew, president of the National Farmers Union, a group that is more closely aligned with Democratic priorities than many other farm organizations, said the constant shift of WOTUS regulations has created uncertainty for farmers.
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And he also raised concerns about the Justice Department’s position that federal pesticide registration and labeling requirements cannot stop states from imposing additional labeling requirements on glyphosate.
DOJ’s position could apply to any pesticide and lead to a "patchwork of regulations" across the country, he told the lawmakers. "From the farmers' point of view, this is a great concern," Larew said.
American Farm Bureau Federation President Zippy Duvall said the SEC’s climate disclosure rule would put a “heavy bookkeeping burden” on farms, especially small to mid-sized operations. “It’s something we need to stop before it gets started,” Duvall said.
Duvall has met with SEC Chairman Gary Gensler about the rule and said they would be meeting again this week.
Mike Brown, president of the National Chicken Council, raised concerns on several fronts, including USDA's proposed new regulations for salmonella and a series of proposed rules that are designed to give livestock and poultry producers more negotiating power with processors.
“Basically what these rules would do is turn any interaction between the processor and the grower into a litigation flash point,” Brown said.
Larew pushed back on that issue, arguing that the existing regulations "limit individual farmers' and growers' ability to challenge deceptive practices" in the industry.
Michael Twining, vice president of sales and marketing for Maryland ag retailer Willard Agri-Service, urged the lawmakers to fight what he considers unnecessary regulations on pesticides. He compared the chlorpyrifos ban to restricting the use of headache medications.
"We cannot allow political science, opinions and social media to influence science," said Twining, who serves on the board of the Ag Retailers Association. "It’s incumbent on the members of this committee to stand firm for science and to push back against the emotion, the popular opinion and to educate people on the use of these tools."
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