USDA Investigates Fertilizer Industry Amid Cartel Allegations

The US Department of Agriculture's Deputy Secretary Stephen Vaden recently visited Iowa to gather information from farmers about their experiences dealing with consolidation and pricing issues in the fertilizer industry.

Vaden spoke at an event hosted by the Iowa Corn Growers Association, where he emphasized that individual stories from farmers would help in the investigation led by the Federal Trade Commission (FTC) into potential unfair pricing or anti-competitive practices.

The FTC investigation is looking into allegations of a 'fertilizer cartel' that may be suppressing competition and driving up prices. Vaden noted that while one or two instances could be explained away, 'if we've got 100 such stories from farmers all across this country, it becomes very difficult for even sophisticated lawyers to explain away such a large and broad-based phenomenon.'

Linda Thrasher, co-founder of Greenfield Nitrogen, shared her company's experience attempting to secure off-take agreements to build a regional-sized anhydrous ammonia manufacturing facility in Iowa. She claimed that retailers and farmer cooperatives they approached refused to make deals with them for fear of being 'blackballed' by the main companies they purchase from.

Vaden stated that the new domestic supply of fertilizer, which includes two new facilities in Louisiana, will help farmers and take market share away from dominant companies. The USDA also initiated a $500 million program called FIELDS to fund domestic projects expanding or constructing new fertilizer production facilities outside of the dominant suppliers.