Even before Russia’s invasion of Ukraine, the price of fertilizer has more than doubled since last year. As the price of the agricultural inputs continue to skyrocket, the U.S. Department of Agriculture (USDA) has announced its efforts to increase American-made fertilizer.
USDA will make available $250 million through a new grant program 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.
“We are announcing an effort to jumpstart independent production of fertilizer made in America,” said USDA Secretary Tom Vilsack. “With Innovation, utilizing, impacting, and assisting sustainably-active farming operations.”
The United States 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.
“I think we have to recognize that we're too reliant on outside sources of fertilizer and the ingredients for fertilizer that we rely on countries that may or may not agree with us on a variety of issues,” said Sec. Vilsack.”
USDA will use funds from the Commodity Credit Corporation (CCC) set aside in September for market disruptions to develop a grant program that provides ‘gap’ financing to bring new, independent domestic production capacity online, similar to the recently announced meat and poultry grants that are designed to promote competition and resilience in that sector.
The new program will support fertilizer production that is:
· Independent – outside the dominant fertilizer suppliers, increasing competition in a concentrated market;
· Made in America – produced in the United States 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 incentivizing greater precision in fertilizer use;
· Farmer-focused – like other Commodity Credit Corporation investments, a driving factor will be providing support and opportunities for U.S. 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.