LUBBOCK, TEXAS (RFD NEWS) — The U.S. Department of Agriculture (USDA) is signaling sharper concern over phosphate fertilizer supplies as farmers look ahead to fall application needs and another year of tight input budgets.
Deputy Secretary Stephen Vaden tells RFD News Markets Specialist Tony St. James that the nitrogen fertilizer outlook is stronger over the medium and long term because U.S. natural gas supplies support domestic production. Energy is a major input in nitrogen fertilizer manufacturing.
“On the nitrate side, we’re going to be blessed in that as years go forward, because we’ve taken the right energy policy in this country,” Vaden said. “When we look at our competitor nations, particularly in Europe and other places, they have put their finger on the scale against fossil fuels. You know what the largest input to creating nitrate fertilizer is? It’s energy. And we have liquid natural gas in abundance here. That’s why a whole host of fertilizer companies have come to the USDA and our federal counterparts throughout the administration. We’ve got numerous new nitrate fertilizer plants that will be going forward, and that will also be plussed up because we have the right energy policy in this country. We’re continuing to look for additional ways in the interim to get more supplies here, but over the medium to long term, America looks great when it comes to nitrates.”
Fertilizer prices saw a noticeable spike when the Strait of Hormuz was cut off to shipping traffic, but Vaden says affordable fertilizer access was an issue long before the bombs started flying in Iran.
“This isn’t a problem that just cropped up with the Strait of Hormuz,” Vaden explained. “This is something that American farmers have been dealing with for five-plus years at this point. It was a long-term problem that got us here. And we’re not only looking for short-term solutions, but long-term ones as well, because I don’t want American farmers to be back in this place 24 months from now, the next time there’s a blow-up in some region of the world.”
Vaden says that with nitrate supplies now largely available, phosphate is the bigger concern. The market is highly concentrated, and the USDA is monitoring production curtailments, export flows, and farmers’ access to fall supplies.
He says the issue is not limited to a single global shipping risk or a recent disruption. It reflects several years of pressure that have left producers exposed when international markets tighten.
USDA is discussing both near-term and long-term responses with other cabinet agencies, with more announcements possible soon.
Vaden says fertilizer companies are boosting phosphate exports to places like Brazil, and he expects to see some positive announcements in the near future regarding U.S. access.
