Farm Advocates Call for DOJ Investigation into Suspicious Spike in Fertilizer Prices

With higher grain prices, farmers have more dollars to pay for inputs — and fertilizer corporations may be taking advantage of that.

 

On Wednesday, December 8, Family Farm Action Alliance sent a letter to the Antitrust Division of the Department of Justice (DOJ) calling for an investigation into the highly-consolidated fertilizer sector on the suspicion of anti-competitive practices. Recent record-breaking fertilizer prices suspiciously coincide with an increase in income farmers are earning from commodity crops like soybeans and corn. While fertilizer corporations claim these prices are the result of shortages and high natural gas prices, their own annual and quarterly reports refute these claims and reveal they have additional capacity they’re not utilizing. 

Today just two companies supply the entirety of North America with potash, a potassium-based fertilizer: Nutrien Limited and the Mosaic Company. In 2019, a mere four corporations represented 75% of the production and sale of nitrogen-based fertilizer in the U.S. Today, the four dominant firms in this sector are CF Industries, Nutrien, Koch, and Yara-USA. According to experts, market abuses are likely when the concentration ratio of the top four firms (CR4) exceeds 40%.

“If these fertilizer corporations are tying the price of their products to the farmer’s ability to pay rather than supply and demand, that equates to an exercise of near-monopoly power,” said Dr. Philip Howard of the International Panel of Experts on Sustainable Food Systems. “Left unchecked, this allows concentrated corporations to exact additional tolls from the supply chain, leaving the farmer with no hope of retaining any gains they produce.”

Family Farm Action Alliance is calling for the DOJ to open an investigation to determine to what extent the actions of these consolidated fertilizer firms are distorting the market, the resulting impact on farmers, and whether policy intervention will be necessary to remediate such distortions. 

“Out here in farm country, we can tell that something stinks about this fertilizer deal,” said Joe Maxwell, President of Family Farm Action Alliance. “The DOJ has the power and the authority to investigate fully, and American farmers deserve nothing less.”

Family Farm Action Alliance’s long-term goal is to transform the food and farm system, shifting government support toward programs that reward farmers for the use of regenerative practices that use less fertilizer — and eliminating the power corporations currently have to shape the markets to their liking.