New economic analysis raises concerns over proposed nitrogen tariffs

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New economic analysis from Texas A&M University has raised red flags for corn growers concerned about rising input costs.

Commissioned by 21 state corn organizations, the study found a historical correlation between corn prices and fertilizer prices.

“These lines overlap, which means that fertilizer and anhydrous ammonia prices have been moving at the same rate as the price of corn for some time, and more so now than in the past,” said lead researcher Joe Outlaw. for the study.

From late 2020 to October 2021, farmers saw anhydrous ammonia prices increase by $688 per tonne. A petition by CF Industries for the U.S. International Trade Commission to impose tariffs on nitrogen fertilizers from Trinidad, Tobago and Russia could drive prices up even further.

“If tariffs create a supply shortage, that will drive up costs even more,” said Chris Edgington, an Iowa corn grower and president of the National Corn Growers Association. “Our request is simple. We simply ask these companies to keep us out of their business disputes and do everything possible to keep their products available and affordable for family farms.

For corn producers, a tariff increase in input costs could be detrimental.

“If the country’s nitrogen export to the United States caused economic harm, I could understand a tariff,” said Missouri farmer Jay Schutte. “I very seriously doubt that they will suffer any economic harm, but the American farmer will certainly suffer, and it’s going to trickle down to the consumer market as well.”

If continued cost increases leave farmers unable to afford fertilizer, a corn shortage could be on the horizon, Schutte warns.

“In the United States, we have a lot of supply chain issues. We could definitely set the stage for having supply chain issues next year with corn shortages,” Schutte said. “We can only control a limited number of factors in the growth cycle. The two main factors limiting corn yield are the amount of nitrogen we put in and the amount of rain we get. We certainly can’t control the rain, but we can control the nitrogen we apply.

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