Category: Economic Impact

TFI Releases 2023-2024 Public Policy Priorities

ARLINGTON, VA – The Fertilizer Institute (TFI) today released its list of 2023-2024 public policy priorities for working with the Biden Administration, regulatory agencies, and a closely divided 118th Congress.

“With the 118th Congress underway, we are strongly advocating for policies that ensure the fertilizer industry is able to continue feeding the world sustainably through innovation, efficiency, and legislative and regulatory updates that are long overdue,” said TFI President and CEO Corey Rosenbusch. “We’re also very much looking forward to engaging on the Farm Bill and finding bipartisan solutions that will strengthen farmers’ bottom lines and environmental stewardship.”

TFI’s priorities are broken down into seven key areas: Economic Growth & Competitiveness; Transportation & Infrastructure; Environment; Safety & Security; Farm Bill Reauthorization; Permitting & Registration; and Innovation.

“Fertilizer is a globally traded commodity and heavily influenced by geopolitical events. Over the past two years we have seen major market disruptions that make clear the need to strengthen domestic production,” Rosenbusch continued. “The Biden Administration’s $500 million grant program is a great start, but what the industry needs is significant change in permitting policy, and ensuring producers have access to critical inputs and affordable energy.”    

Those changes include reforming the National Environmental Policy Act (NEPA), which sets forth a convoluted, time consuming, and expensive permitting process; the designation by the United States Geological Service (USGS) of phosphate and potash as critical minerals; and policies that ensure safe, secure, and reliable access to affordable energy.

“The Farm Bill for us is all about conservation and continuing to push for science-backed 4R Nutrient Stewardship adoption by growers and removing the existing barriers to grower adoption,” Rosenbusch said. “Policies we want to see included are recognizing Certified Crop Advisors (CCAs) as Technical Service Providers (TSPs), which will enable greater cost-share opportunities for growers working with agricultural retailers. Additionally, we’re pushing for financial incentives to growers through use of the Conservation Service Model to utilize conservation and environmental best practices.”

Strengthening the domestic fertilizer industry and pushing for policies that promote grower adoption of nutrient stewardship practices are a heavy focus, but not the only ones eyed by TFI.

“Transportation and infrastructure are always big issues for us. Fertilizer needs to be delivered to growers exactly when and where they need it and there is not much room for error or delay,” Rosenbusch explained. “Supply chain disruptions have hit all industries hard, but fertilizer delays can lead to lower crop yields and less food. Fertilizer moves year-round via railways, highways, waterways, and pipelines, and we need a safe and reliable infrastructure network. Food security is national security, and fertilizer availability is paramount to keeping us all fed.”

Innovation and 4R research are two areas where TFI has hit the ground running, with the Plant Biostimulant Act and the ACE Agriculture Act both introduced in each chamber of Congress in March.

“Biostimulants are a relatively new innovation in agriculture,” Rosenbusch explained. “There is great potential in these products, but as with any new technology there are hurdles.”

Among the biggest of the hurdles mentioned by TFI’s Rosenbusch are the lack of a clear and consistent definition for “biostimulant” and the fact that there is no uniform framework to regulate them as plant nutrition products.

“TFI and our members are excited about biostimulants and we’re also introducing a Biostimulant Certification Program in the coming months. The aim of the program is to foster growth and farmer confidence in this innovative space,” said Rosenbusch.

The ACE Agriculture Act will help farmers by focusing United States Department of Agriculture (USDA) research on critical areas such as soil health and increasing crop yields. The fertilizer industry has long supported agricultural research through the 4R Research Fund, as well as independent research that has focused on multiple crops, geographic locations, and methods to show farmers the beneficial outcomes of new technologies and farming practices. In addition to industry efforts through the 4R Research Fund, TFI is a year and a half into a nationwide goal of having 70 million US farming acres under 4R nutrient stewardship management by 2030.

“We’ve done the research and know that these practices have both environmental and economically beneficial outcomes associated with their implementation,” Rosenbusch continued. “But these practices are not one-size fits all and not only is each farm different, but each acre on each farm is unique and growers need to feel confident when implementing new practices. We believe more research directly from the USDA on these critical issues can only help farmers continue growing that confidence and lead to wider farmer adoption.”

TFI will use its member-driven public policy priorities to educate policymakers on the realities of an essential industry that is responsible for half of all food grown around the world. “Our industry is vital to ensuring our farmers can enrich the soil and grow the crops that feed the world and its growing population,” Rosenbusch concluded. “We look forward to working with the Biden Administration and the 118th Congress.”

TFI’s full list of 2023-2024 public policy priorities can be found here.

 

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The Fertilizer Institute (TFI) is the leading voice of the nation’s fertilizer industry. Tracing its roots back to 1883, TFI’s membership includes fertilizer producers, wholesalers, retailers and trading firms. TFI’s full-time staff, based in Washington, D.C., serves its members through legislative, educational, technical, economic information and public communication programs. Find more information about TFI online at TFI.org and follow us on Twitter at @Fertilizer_Inst. Learn more about TFI’s nutrient stewardship initiatives at nutrientstewardship.org and on Twitter at @4rnutrients.

Corey Rosenbusch Testifies on Fertilizer Markets and Solutions to House Committee on Agriculture

“If there is one thing you take away from my comments, it is this: Fertilizer is a globally traded commodity, subject to international pressures and geopolitical events.” This emphatic statement was made by TFI president and CEO Corey Rosenbusch while testifying at a House Committee on Agriculture hearing on February 28th. The hearing, titled “Uncertainty, Inflation, Regulations: Challenges for American Agriculture,” lasted nearly 5 hours and focused heavily on market dynamics of the fertilizer industry and pressures currently facing the U.S. agricultural sector at large.

When asked what Congress can do to help ensure farmers continue to have access to a stable source of fertilizers, Rosenbusch pointed to the need for regulatory certainty as many factors affecting the fertilizer market are out of the control of Congress. Those factors include the international pressures and geopolitical events mentioned by Corey early in his testimony.

Prime examples of those factors are sanctions on Belarus, which supplies 20% of the world’s potash supply; China, which is a major exporter of fertilizers, but has imposed restrictions on fertilizer exports; and Russia, which has historically provided 20% of global fertilizer supplies as the world’s largest fertilizer exporter. “Domestic production of fertilizer accounts for only 7% of global production and 90% of all fertilizer usage happens outside of the United States,” Rosenbusch explained. “Geopolitical events have been the biggest disrupter to fertilizer markets in recent years.”

Energy policy is another area where Congress can provide relief by ensuring that fertilizer producers have an abundant and affordable supply of natural gas. Rosenbusch highlighted the fact that when Russia restricted much of Europe’s natural gas supply last year, approximately 70% of European nitrogen fertilizer production shutdown, leading to additionally market volatility.

The market news wasn’t all bad, though. Rosenbusch pointed out that in recent months fertilizer input costs have come down. European nitrogen plants have restarted as natural gas prices have moderated following a mild winter and China has been slowly exporting more fertilizer.

After providing the above examples of factors influencing fertilizer markets that are out of the control of Congress, Rosenbusch circled back to the regulatory certainty needed by the industry that Congress can provide, explaining that fertilizer production facilities are capital intensive and typically cost between $1-$4 billion to build. Rosenbusch also cited listing potash and phosphate as critical minerals, permitting reform to streamline long delayed fertilizer projects, focusing on USDA conservation programs that empower agronomists and certified crop advisors to help farmers with nutrient management, and a focus on supply chain bottlenecks through improving rail service and promoting driver recruitment and retention.

Click HERE to view the full recording of the House Committee on Agriculture hearing.

TFI CEO Rosenbusch Testifies at House Ag Committee Hearing on Agricultural Challenges

Arlington, VA – The Fertilizer Institute (TFI) President and CEO Corey Rosenbusch today provided official testimony during the House Committee on Agriculture hearing Uncertainty, Inflation, Regulations: Challenges for American Agriculture.

“Fertilizer is an essential tool for farmers to achieve the yields necessary to feed our growing world,” Rosenbusch said. “We appreciate the opportunity to shed light on current market dynamics and offer solutions to the pressures currently facing the U.S. agricultural sector. As always, the fertilizer industry is committed to ensuring adequate supply to meet farmer demand for the nutrients that are so essential to growing healthy and abundant crops.”

Rosenbusch focused much of his testimony on the fact that fertilizer is a globally traded commodity subject to international pressures and geopolitical events.

“Domestic production of fertilizer accounts for only 7% of global production and 90% of all fertilizer usage happens outside of the United States,” Rosenbusch continued. “Geopolitical events have been the biggest disrupter to fertilizer markets in recent years.”

The geopolitical events Rosenbusch referred to included sanctions on Belarus, which supplies 20% of the world’s potash supply; China, which is a major exporter of fertilizers, but last year imposed restrictions on fertilizer exports; and Russia, which has historically provided 20% of global fertilizer supplies as the world’s largest fertilizer exporter.

Rosenbusch then offered solutions and items Congress could act on to improve domestic production and supply.

“While Congress cannot control Russia and China, there are a number of areas where policy could have a positive impact on the agricultural sector,” Rosenbusch concluded. “Regulatory certainty is perhaps the most significant area Congress could help. Additionally, listing potash and phosphate as critical minerals, energy policy that supports an abundant and affordable supply of natural gas, permitting reform to streamline long delayed fertilizer projects, focusing on USDA conservation programs that empower agronomists and certified crop advisors to help farmers with nutrient management, and a focus on supply chain bottlenecks through improving rail service and promoting driver recruitment and retention.”

Rosenbusch’s oral statement can be found here

Rosenbusch’s full written testimony can be found here.

TFI’s full policy solutions document can be found here.   

 

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The Fertilizer Institute (TFI) is the leading voice of the nation’s fertilizer industry. Tracing its roots back to 1883, TFI’s membership includes fertilizer producers, wholesalers, retailers and trading firms. TFI’s full-time staff, based in Washington, D.C., serves its members through legislative, educational, technical, economic information and public communication programs. Find more information about TFI online at TFI.org and follow us on Twitter at @Fertilizer_Inst. Learn more about TFI’s nutrient stewardship initiatives at nutrientstewardship.org and on Twitter at @4rnutrients.

TFI: Fertilizer Comes Off the Rails in One Week without Congressional Action

Arlington, VA – In a letter to Congressional leadership, The Fertilizer Institute (TFI) today again urged Congress to act to avert a potential rail strike that would see fertilizer and fertilizer inputs embargoed roughly five days prior to the inflation worsening strike.

“We warned that the U.S. couldn’t afford a rail strike in September, and that still remains true today,” said TFI President and CEO Corey Rosenbusch. “The movement of fertilizer is greatly dependent on rail throughout the year. A rail strike would be devastating to fertilizer manufacturing and to fertilizer distribution to the farmers, who need it to grow the food on which the world depends.”

The tentative agreements reached by all parties at the last minute in September were welcome news at the time. Currently, it is possible that a strike could begin as soon as November 19, unless the “status quo” period is extended. If an agreement is not reached or if the “status quo” period cannot be extended, Congress must act. Fertilizer shipments could be embargoed as soon as November 14.

“We averted a strike in September, but in preparation for a rail stoppage certain sensitive cargo starts coming off the line. Fertilizer falls into that category and will likely be embargoed on Monday, November 14,” Rosenbusch continued. “For every day shipments are embargoed we essentially lose five shipping days because of the ramp down and ramp up.”

The situation is compounded by continuing logistical and supply chain disruptions that remain unresolved.

“There is zero elasticity in transportation at the moment,” Rosenbusch explained. “We continue struggling with enough trucks, drivers, and most recently, barges. Low water levels have severely curtailed barge movements along the Mississippi River and have affected grain and fertilizer shipments. We’re operating without a backstop and ultimately consumers are going to be the ones paying for inaction.”

Absent an agreement between the rail carriers and the unions, the only thing to stop an economically devasting rail strike is action from Congress.

“Congress must act and they must act immediately upon its return on November 14,” Rosenbusch said. “A rail stoppage is going to exacerbate inflation and hit U.S. consumers right before the holidays. Congress can avert this disaster and they must do so quickly.”

 

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The Fertilizer Institute (TFI) is the leading voice of the nation’s fertilizer industry. Tracing its roots back to 1883, TFI’s membership includes fertilizer producers, wholesalers, retailers and trading firms. TFI’s full-time staff, based in Washington, D.C., serves its members through legislative, educational, technical, economic information and public communication programs. Find more information about TFI online at TFI.org and follow us on Twitter at @Fertilizer_Inst. Learn more about TFI’s nutrient stewardship initiatives at nutrientstewardship.org and on Twitter at @4rnutrients.

TFI: America Can’t Afford a Rail Strike, Congress Must Act

Arlington, VA – The Fertilizer Institute (TFI) today continued urging agreement between rail carriers and labor groups to avoid an economically catastrophic rail strike and again asks Congress to intervene.

“Nine out of the twelve labor unions have come to tentative agreements with the rail carriers, which is great news, but we are getting down to the wire,” TFI President and CEO Corey Rosenbusch said. “Tomorrow is the last day Congress has to step in and avoid what would be an absolutely devastating strike that farmers and consumers cannot afford.”

The production and movement of fertilizer is heavily dependent on rail, both for finished product and production inputs. Many of those products have already been removed from the rails in preparation for a potential rail stoppage.

“For every day this uncertainty continues, we essentially lose five shipping days because of the ramp down and ramp up,” continued Rosenbusch. “If this situation is not resolved by tomorrow, it could quickly impact supplies for fall application and lead to a reduction in U.S. production at a time when 70% of European production has been curtailed or ceased due to Russia’s shutoff of natural gas supplies.”

Congress has the power to step in and avert a rail strike if agreements between the rail carriers and labor unions are not reached.

“Congress can act to implement the President’s Emergency Board compromise agreement,” Rosenbusch concluded. “Action must be taken to ensure rail networks continue operating or American consumers and global food security will pay for it.”

 

 

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TFI Urges Speedy Rail-Labor Union Contract Settlement

Arlington, VA – The Fertilizer Institute (TFI) today thanked members of the Presidential Emergency Board (PEB) for hearing from both rail carriers and their labor unions and providing measured recommendations on a pending contract agreement between the two. TFI urges all parties to swiftly reach a compromise and contract agreement. Both sides have until Sept. 16 to evaluate the PEB’s recommendations during a mandated 30-day cooling-off period.

“Uncertainty of this nature is yet another disruption in an already complex environment for farmers, so speedy resolution is paramount,” said TFI President and CEO Corey Rosenbusch. “Over half of all fertilizer moves by rail year-round throughout the United States and the timeliness and reliability of fertilizer shipments is absolutely critical. If farmers do not receive fertilizer, it results in lower crop yields, higher food prices, and more inflation for consumers.”

 

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Iowa State University Study Can’t Refute that Increased Production Costs and Commensurate Supply Chain Issues Drove Increase in Fertilizer Prices

Fertilizer prices increased to 10-year highs over 2021 and 2022, leading growers, policymakers and others in the agriculture industry to look for the reason why. Those in the fertilizer industry who experienced the back-to-back-to-back events first-hand that drove prices up over the course of those 24 months are keenly aware of the reasons why, but many outside the industry latched onto something more nefarious: market consolidation and greed.

A recently released report undertaken by the Center for Agriculture and Rural Development (CARD) at Iowa State University (ISU) at the request of Iowa Attorney General Miller came to the primary conclusion that they did not have enough evidence to refute that “increased production costs and commensurate supply chain issues were the main cause of increased fertilizer prices in 2021/2022.”

This finding was not news to TFI. In fact, TFI has been spending a good chunk of these last two years educating commodity groups, farmer organizations, and policymakers about the myriad issues impacting fertilizer markets and influencing fertilizer prices. You know, things such as the COVID-19 pandemic, supply chain disruptions, increased energy costs, hurricanes, deep freezes, geopolitical unrest, political sanctions, and the Russia-Ukraine war.

Beyond the study’s primary conclusion, TFI has examined the report and provided additional key takeaway points and provided them below.

  • The study acknowledges and articulates well a variety of factors influencing fertilizer prices and markets. While there is always an ability to add more detail and background, the study provides a more holistic view of the market than the Texas A&M white paper that only focused on the change in domestic natural gas price. The ISU study could have made a stronger connection between global energy and fertilizer markets and the domestic fertilizer market.
  • A trend analysis of the price relationship between ammonia, granular urea, Henry Hub natural gas, international natural gas and corn price showed that “[A]nalyses imply fertilizer prices are likely to rely more on input costs than output prices most of the time. In recent years, anhydrous ammonia prices have depended on international natural gas prices, while urea prices relied more on domestic natural gas prices.” Several statistical and economic methods were utilized to arrive at these conclusions.
  • The authors provide a robust conversation on market power and economic profit, explaining “that while economists agree concentration is a necessary condition for market power, they have for decades now mostly abandoned the assertion that concentration is sufficient for market power.” This statement means that looking only at the correlation between the level of concentration or number of firms and the reported profits of an industry to determine market power and influence has been abandoned for other more robust techniques.
  • The media often discusses the fertilizer industries profits, stock prices and returns as evidence of market power. Economists have always been wary of looking at these metrics as these measures are not identical to the economic profits economists seek when measuring market power.
    • “The fertilizer industry’s average net income return over the past few years is high but comparable to other large industries, especially when taken over a longer run as fertilizer companies had low (sometimes negative) profits prior to 2020. The fertilizer industry’s average stock price return is also comparable to that of other firms in other large industries and comparable with a large portfolio of other firms and seems to be commensurate with its relative risk. A similar comparison to Iowa farm incomes and land value returns shows that the fertilizer returns actually lag those slightly.”
    • “Stock prices, especially, reflect what investors think the potential for earnings are, and stock price returns for these companies before and during the pandemic should reflect investors’ broader market perceptions of each firm’s risk and return. The takeaway from examining stock price returns is that the fertilizer industry is similar to the broader market from an investment return perspective.”

Upon publication of the study, Iowa Attorney General Miller in a news release thanked ISU for studying the fertilizer market and prices and for publishing the report. He also promised his office would continue monitoring the situation.

TFI is appreciative of economist at ISU for completing this in-depth study that highlights both current market supply and demand factors and their influence on markets, as well as their explanation of key economic principles related to common questions about the industry. While the study does leave several questions unanswered, the study provides the best analysis data will allow to date.

TFI welcomes any member feedback or perspective on conclusions of the study and ask that you please send those comments to TFI Director of Market Intelligence Jason Troendle at [email protected] or (202) 515-2710.

 

TFI Statement on USDA Fertilizer Innovation Initiative

Two out of every five people alive today owe their lives to the use of fertilizer and TFI welcomes initiatives to strengthen domestic fertilizer production including the U.S. Department of Agriculture’s (USDA) $250 million grant program to support the development and production of innovative fertilizers.  

Innovation has been the hallmark of the fertilizer industry. Enhanced efficiency fertilizers and other new technologies play a big role in our ability to feed a growing population efficiently and sustainably. While new products are the focus of today’s announcement, it’s important to recognize the innovative work undertaken by companies in the U.S. market, who have made a strong comeback from the days of high natural gas prices to leverage the shale gas revolution.

We have a more robust U.S. fertilizer industry than we have seen in two decades. By enacting policies that encourage safe, abundant, and affordable supplies of natural gas, which is the chief feedstock for nitrogen production, ensuring that permitting of production plants is streamlined and adding phosphate and potash to the Department of the Interior’s Critical Minerals list, policymakers can also support this vital industry.

The fertilizer industry’s investment in innovation has been longstanding. Most recently, TFI partnered with USDA, the Environmental Protection Agency (EPA) and other key stakeholders on the Next Gen Fertilizer Challenges. Collectively, the challenges aim to accelerate the development of innovative fertilizer product technologies and to increase the use of existing enhanced efficiency fertilizers (EEFS) that maintain or increase crop yields and reduce environmental impacts to air, land, and water.

Additionally, we look forward to providing USDA with data for its RFI.  Fertilizer is resource dependent, capital intensive, and requires high-skilled labor and expertise to safely produce, handle, transport, and store. Ninety percent of all fertilizer in the world is used outside the United States, which means that globally supply and demand dynamics are critical factors in the price and availability of fertilizers. Still, when compared to peer sectors around the world, the U.S. fertilizer industry is among the most competitive and environmentally advanced. 

 

TFI and NGFA Urge Biden Administration Work with Canada to Ease Supply Chain Strains

ARLINGTON, VA – In a March 7 letter to President Joe Biden, The Fertilizer Institute, the National Grain and Feed Association, and 19 other members of the Agricultural Transportation Working Group requested the administration work with the Canadian government to avert a major railway labor strike and to rescind the cross-border vaccine mandate for workers moving essential commerce.

“(I)f the U.S. and Canadian governments allow the following supply chain disruptions to persist into the spring fertilizer season, the impacts to our industry and North American farmers could be devastating,” the working group noted.

The letter references a potential upcoming labor disruption at Canadian Pacific (CP) Railway. The Teamsters Canada Rail Conference recently voted in favor of strike action, which could happen as early as March 16. The impact would be significant for grain movements on both sides of the border for livestock feeding and processing operations served by the CP. The strike also would halt the CP route that carries U.S grain to the Pacific Northwest export market. Grain is CP’s largest line of business and approximately 10-15 percent of CP’s business is fertilizer, the working group noted.

“A CP railway strike would severely curtail fertilizer supply and shipments into the United States and would happen at the worst possible time as farmers are planting their 2022 crops,” the letter states. “Given the fragility of current supply chains, urgent attention and engagement with all parties is needed to avert a potential strike.”

The letter also urged the U.S. and Canadian governments to modify or rescind their mandates blocking unvaccinated foreign nationals, including truck drivers, from crossing the border. Canada’s vaccine mandate requires U.S. truckers to show proof of vaccination before entering the country and the U.S. mandate requires foreign cross-border truckers to be vaccinated. The U.S. Department of Homeland Security has said its border policy will remain in effect through April 21.

“The border policy has raised prices because it has constrained trucking capacity and made truck movements more expensive and less timely,” the letter states.

Over one million short tons of fertilizer cross the U.S.-Canada border by truck each year. March, April and May are peak months for fertilizer applications across the northern states.

“Given the urgency of several supply-chain challenges, we urge revision or rescission of the border policy prior to April 21,” the working group stated.

View the full letter here.

 

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Statement on Russia-Ukraine Conflict

TFI is concerned about the destabilizing situation occurring in the Ukraine. Our main concern is the safety of all the citizens in harm’s way.

Currently, it is unclear the exact magnitude and how the Russia-Ukraine conflict will affect the already-tight global market for fertilizer, but it will add additional pressure on a market that has already experienced many challenges over the last 18 months.

It has been implied that fertilizer companies may take advantage of the current situation, but that is far from the truth. The U.S. fertilizer industry is committed to serving farmers and makes it unequivocally clear that ensuring grower access to the nutrients needed to sustain people around the world is of the highest priority.

Because 90% of all fertilizer used is consumed outside the United States, the actions of Russia will impact the global market for fertilizer around the world. Russia is the second largest producer of ammonia, urea, and potash and the fifth largest producer of processed phosphates. In terms of their share of the global export market, Russia accounts for 23% of ammonia, 14% of urea, and 21% of potash, as well as 10% of processed phosphate exports. The conflict in the Ukraine will also put additional stress and uncertainty on energy markets. Russia supplies approximately one-third of Europe’s natural gas, the main feedstock to produce nitrogen fertilizers.

Because of Russia’s large fertilizer production and its role as a global fertilizer supplier, the removal of Russian product from the global marketplace will have an impact on supply. Despite the benefits afforded by a robust U.S.-based fertilizer industry, prices for our products are driven by global supply and demand factors. There have been reports of misleading information regarding the applicability of U.S. sanctions to companies in the industry, and TFI strongly encourages companies to consult legal counsel for advice on sanctions-related issues at question.