SENATE COMMITTEE ON AGRICULTURE, NUTRITION, & FORESTRY
COMMITTEE HEARING
For questions on the note below, please contact the Delta Strategy Group team.
On May 12, the Senate Committee on Agriculture, Nutrition, and Forestry held a hearing entitled “Perspectives on the Fertilizer Industry: Ensuring a Stable and Affordable Supply for American Producers.” The witnesses in the hearing were:
- Andy Green, Principal and Senior Advisor, Center Market Strategies
- Trent Kubik, President, South Dakota Corn Growers
- Eddie Melton, President, Kentucky Farm Bureau Federation
- Corey Rosenbusch, President and CEO, The Fertilizer Institute
- Joshua Westling, CEO, J. Westling & Co., LLC
Below is a summary of the hearing prepared by Delta Strategy Group, which includes several high-level takeaways, followed by summaries of opening statements and discussion.
Key Takeaways
- Multiple Republican members and witnesses commended the Trump administration for steps taken to address high fertilizer prices, with Chairman Boozman (R-AR) highlighting the Jones Act waiver, the refocusing of the Fertilizer Production and Expansion Program (FPEP), and Department of the Interior Secretary Burgum’s addition of phosphate and potash to the critical minerals list.
- Rosenbusch noted that unlike oil and gas, fertilizer deteriorates over time and cannot be stored for long periods, making a reserve impractical. Green added that fertilizer must be considered alongside seed resiliency tools, such as the National Plant Germplasm System (NPGS), as part of a broader national security strategy.
- The Fertilizer Price Transparency Act, the Fertilizer Research Act, and the Homegrown Fertilizer Act were highlighted as key legislative tools to address market transparency and domestic production capacity, with Kubik, Melton, and Green expressing support for the passage of these bipartisan measures.
- Multiple members and witnesses discussed increasing domestic fertilizer production as a durable, long-term solution to supply chain vulnerability. Chairman Boozman and Senator Hoeven (R-ND) called for expanded federal investment in domestic capacity. Westling outlined how his Project Meadowlark facility will produce 365,000 tons of urea-ammonium nitrate (UAN), 140,000 tons of ammonium thiosulfate (ATS), and 52,000 tons of diesel exhaust fluid per year once online in 2029, calling for permitting reform and front-end capital incentives to accelerate more projects like it.
- Rosenbusch outlined that the U.S. faces a challenging global fertilizer market driven by foreign government intervention, with China restricting exports despite controlling a third of global nitrogen production and 43 percent of global phosphate supply, Russia implementing export bans following damage to twenty nitrogen plants from Ukrainian drone strikes, and India paying nearly $1,000 per metric ton for urea through heavy government subsidies, effectively setting the global price floor and outcompeting U.S. buyers.
- Senators Marshall (R-KS) and Grassley (R-IA) highlighted the need to remove the sixteen percent countervailing duties on Moroccan phosphate imports. Senator Marshall outlined how it would provide the quickest and most immediate relief U.S. farmers could see today, and Senator Grassley noted that a Texas A&M study found farmers incurred nearly $7 billion in additional costs over five growing seasons because of those duties.
- Discussions covered the urgent need for greater transparency in the fertilizer market, with witnesses agreeing that the current opacity of the supply chain leaves producers unable to understand why they are paying the prices they are, when to buy, or what to expect in the future.
- Senator Moran (R-KS) raised what a reopening of the Strait of Hormuz would mean for fertilizer prices and availability, with Rosenbusch noting it would take at least a month for stranded vessels to clear and reach market destinations. Rosenbusch further noted that roughly forty ammonia and nitrogen plants in the region have either been curtailed or damaged during the conflict, meaning it could be months or years before those production facilities come back online.
- Senators Hoeven and Fischer (R-NE) highlighted precision agriculture and ag-tech innovation as near-term tools to help farmers reduce fertilizer use and lower input costs. Kubik noted that many farmers are already using variable-rate technology through their retailers to apply fertilizer more precisely based on soil testing, and that the goal is not necessarily to use less nitrogen overall but to place it more accurately. Melton stated that continued investment in research and development through land grant universities is critical to expanding adoption of these technologies, and Kubik acknowledged that while bio-based products are garnering attention, they are not yet reliable enough to replace commercial fertilizer.
- Ranking Member Klobuchar (D-MN), joined by multiple Democratic Senators, raised concerns about the compounding effect of the war in Iran and across-the-board tariffs on fertilizer and fuel prices.
SUMMARY
Opening Statements and Testimony
Committee Chairman Boozman (R-AR)
While input prices for our producers have been stubbornly high for the past several years, this situation has recently become more acute as farm bankruptcies increase, fuel prices remain high, and interest rates have yet to come down. The cost of fertilizer has gone up, which is not a simple problem to address, as fertilizer is not a single uniform input. Nitrogen, phosphate, and potassium (NPK), present a complicated picture of global supply chains that have been affected by the war in Ukraine, trade disputes that resulted in countervailing duties, and the recent conflict in the Middle East. The administration has responded to high fertilizer prices over the last few months by waiving the Jones Act and refocusing the FPEP to ensure projects funded under this program are up and running as soon as possible. In November, Department of the Interior Secretary Burgum announced the addition of phosphate and potash to the critical minerals list, which will streamline regulatory hurdles and increase domestic production of these fertilizer inputs. The importance of these minerals to food security, which is national security, is clear, and this was a welcome and needed change. Department of Agriculture Secretary Rollins has continued to engage with our producers and brought together her colleagues from across the administration to determine what additional steps they can take to provide relief. In the immediate future, Congress must provide additional assistance to supplement what USDA provided with farmer bridge payments and the assistance for specialty farmers programs, to ensure producers have the working capital available to see them through the crop season.
Ranking Member Klobuchar (D-MN)
In the months since the war began, fertilizer prices have spiked more than forty percent. The cost of diesel has hit near record highs in Midwest states. Nearly half of the global urea and thirty percent of ammonia passes through the Strait of Hormuz. Even before the war, farmers were walloped by across-the-board tariffs. The Supreme Court found the tariffs illegal, and last week the Court of International Trade ruled against the President’s authorities under a different statute for these tariffs. Beyond the geopolitical challenges impacting input prices, there are other reasons as well. Farmers have just a handful of domestic suppliers to choose from, with little transparency about the prices they pay. In 2024, four fertilizer companies accounted for 77 percent of U.S. nitrogen fertilizer sales, and all domestic potash and phosphate. We need to increase domestic fertilizer production and storage. Acting now will help stabilize prices and give farmers the certainty they need, but it is going to have to be a combination of things, ending the tariffs or reducing them or making them much more targeted, ending this war, and finding a way to resolve it so the Strait of Hormuz is open again, and addressing the long-term systemic problem of the lack of competition in this area.
Andy Green, Center Market Strategies
For over five years, farmers have endured price spikes and sustained higher prices, squeezing their margins and affecting their planting choices. Fertilizer markets are highly concentrated. This administration has prioritized investigations in agricultural competition around agricultural inputs and cattle markets. High, sustained increases in profits should also be cause for antitrust scrutiny, particularly in light of market shocks that are repeating today. Effective enforcement of the law also requires funding and staffing at agencies. More transparency would be beneficial for a more accountable fertilizer market. Public reporting can highlight and deter problematic trends. In that way, transparency can lead to beneficial outcomes for farmers even beyond their use of the information itself. Regular public company disclosure should be preserved and enhanced. Over the course of three years, FPEP invested over $778 million in more than 100 projects across 39 states. Funding for USDA’s Rural Cooperative and Business Services and the Agricultural Marketing Service is important for these types of efforts and others that provide more choices for farmers. Consumers can support pro-competition initiatives and incentives upstream for farmers. Clear labels for consumers help producers who do the hard work of delivering value-added products that consumers want. In the fertilizer sector, opportunities may exist to align America’s desire for healthy food and a clean environment with competition and resilience in the industry. Economic research and academic legal analysis are foundational aspects of building and maintaining effective market competition. Government investment in objective, unbiased research helps policymakers identify trends and design interventions to restore market competitiveness. Special attention should be given to ensuring the maintenance and staffing of the Agricultural Research Service’s NPGS, to avoid the loss of irreplaceable genetics.
Trent Kubik, South Dakota Corn Growers
Despite the cost of natural gas in the U.S. being relatively cheaper than any fertilizer-producing area in the world, the price of nitrogen fertilizer in the U.S. has continued to rise in concert with prices in areas with higher-cost natural gas. The resulting rise in margins for U.S. manufacturers should encourage production expansion and higher capacity utilization for the industry. Instead, market power has allowed manufacturers to maintain higher prices at the expense of the U.S. farmer. Vertical integration has not led to efficiency gains passed on to growers and consumers. The integration has resulted in the largest fertilizer companies locking up and leveraging distribution channels, entrenching their dominant position, and extracting excessive profits from farmers and consumers. The Fertilizer Price Transparency Act of 2026 will make the market for key farming inputs more transparent and represents a step toward making the market more competitive. It may also help provide data to aid analysis of whether market control has been used to limit the supply of fertilizer. The Fertilizer Research Act also increases transparency and would provide much-needed information to better assess the marketplace, including key data such as sector capacity utilization rates. Farmers need more competition in this marketplace. Federal antitrust laws exist for precisely this reason: to promote and sustain competition. Increased competition from more participants in the fertilizer manufacturing space is the only thing that can deliver meaningful and durable price relief.
Eddie Melton, Kentucky Farm Bureau Federation
The current crisis and disruptions in the Strait of Hormuz have exacerbated the problem of fertilizer prices. The shipping disruptions contributed to an increase in the price of nitrogen fertilizer. The unpredictability in the region has led to concerns about availability not just for this current crop year, but for next year as well. Many farmers are operating with little or no working capital, limiting their ability to manage risk or invest in future production. Greater transparency in the fertilizer market and ensuring farmers have access to the fertilizer they need to get through this growing season is essential. We appreciate the efforts of the administration so far, but we continue to call on the President and Congress to do everything in their power to increase availability of fertilizer and ease the price burdens on farmers this growing season. Expanding domestic production would improve supply reliability and help moderate price volatility over time. Congress should act now with additional economic assistance to help farmers manage today’s cost pressures, prevent further financial strain, and stabilize operations while longer-term fixes are put in place.
Corey Rosenbusch, The Fertilizer Institute (TFI)
Fertilizer is not a single product but is typically represented by three macronutrients: nitrogen, phosphate, and potash, each with its own unique market dynamics. The U.S. does have significant production of nitrogen and phosphate, and while the U.S. has some potash production, we import over 98 percent. The U.S. accounts for only seven percent of global fertilizer production, and is a net importer of fertilizer. Over ninety percent of all fertilizers applied in the world are used outside of the U.S. We have one of the world’s most sophisticated logistics systems to enable large-scale delivery of fertilizer. That infrastructure supports strong competition and options for farmers from both domestic and international suppliers to the market. Fertilizer is a globally traded commodity subject to fierce competition and global supply and demand. The closure of the Strait of Hormuz impacted about 34 percent of globally traded urea, twenty percent of phosphate, and half of the world’s sulfur exports. Iran is the second largest exporter of urea. Twenty percent of the natural gas is supplied from the region, and natural gas is the feedstock for all nitrogen fertilizers. The Strait is only part of the story. There have been 31 ammonia plants in the region that have curtailed production or have been damaged during the conflict. 49 plants in India and South Asia were closed due to the disruption of their natural gas supply from the region. Even with the Strait reopening, we do not know the extent of the damage to those production facilities. These issues exacerbated what was already a tight global supply. China, the world’s largest fertilizer producer, accounting for about a third of global nitrogen production and 43 percent of the global phosphate supply, is currently restricting its exports. Twenty Russian nitrogen plants have been damaged due to Ukrainian drone strikes, and Russia has also implemented an export ban and fertilizer export restrictions.
Joshua Westling, J. Westling & Co., LLC
The cost of moving fertilizer to where it is needed, and the consequences when it does not arrive on time, are borne by our farmers. Often, they are also exposed to supply disruptions thousands of miles away from their operations. One challenge unique to fertilizer projects is that so little domestic nitrogen capacity has been built in the U.S. for the past several decades. Unlike sectors such as power generation or data centers, there are relatively few recent reference projects for institutional investors, lenders, engineers, and contractors to rely upon. As a result, substantially more diligence, engineering work, and development capital are required before large-scale private capital can move with confidence. If domestic fertilizer production is truly strategic infrastructure, then we need to finance and permit it as such. If domestic fertilizer capacity is truly a strategic priority, then federal timelines must operate with the urgency that priority requires. Clear and predictable timelines allow private capital to move faster and strategically important projects to come online sooner. Large industrial projects move through multiple federal processes simultaneously. When agencies operate independently, delays compound and timelines stretch unnecessarily. Better coordination would materially accelerate the deployment of private capital into strategically important domestic capacity. Every year of delay is another planting cycle exposed to fragile supply chains and foreign dependency. The faster strategic federal support becomes readily deployable, the faster new domestic capacity comes online.
DISCUSSION
Chairman Boozman (R-AR): What information do you have access to that helps you better understand the input markets, and what additional information would be helpful? Kubik: Much of our information comes through retailers and the data they are receiving. It is somewhat understandable, but it is difficult to comprehend how corn prices can be at one level while fertilizer prices remain elevated, even when corn prices decline. The market is complex, with what can feel like an overwhelming amount of information. It is also so complex that there is almost too much information; Melton: Knowing what the supply is that we are dealing with ahead of time and what the supply is going to be moving forward is key.
Senator Thune (R-SD): Can you elaborate on how the price you have paid for nitrogen and phosphate fertilizers has changed over the last several years and how those changes have impacted your planting decisions? Kubik: In 2020, my farm paid $355 for a ton of urea. By 2022, that price jumped to $830 a ton. There was some retraction in 2023 and 2024 to the $500 to $600 range, which is not sustainable, and we cannot be profitable at those levels. Looking at phosphate, monoammonium phosphate (MAP) was $435 per ton in 2020, jumped to $1,100 per ton in 2022, and remained consistently high. It came off that high of 2022 but stayed in the $700 to $800 range consistently for the last four to five years. We have applied less because of it, and in 2025, we did not apply any phosphate on our farm because it just did not make economic sense. We are taking the risk that in the coming years, it will get cheaper, and we can catch up. We have dealt with this for a long time, and when world events happen, they exacerbate the problem. This has been a longstanding problem that predates current events, but current events are contributing to it.
Ranking Member Klobuchar (D-MN): How does price transparency in the fertilizer market help farmers gain insight into the market and make informed financial decisions, and how is it helpful during the current market volatility? Kubik: It is huge. We want to understand this market. We want transparency for risk mitigation, so we can understand how we purchase our fertilizer, when we do it, the trends, everything else, and pull back some layers to see how our fertilizer, one of our main input components, is priced to us.
Ranking Member Klobuchar: What were some of your key findings when you previously examined competition challenges in fertilizer and other input markets during the last administration? Green: On fertilizer, we did a request for comments and published a summary. This was in 2022 and 2023, and many of the trends today were present then. These have been building up for several years. There are a small number of choices, high concentration, high prices, and prices that follow corn prices rather than the supply and demand for the inputs into fertilizer itself. There are some reasons why it might be connected, but the extent of the connection is really a focus of concern.
Ranking Member Klobuchar: How are these higher costs going to affect the next generation of farmers that are trying to get started, and may not have the margin or the savings of some of our more established farmers? Melton: We have probably seen four years of balance sheet deterioration. We have had four years where prices have declined, and basically all our inputs have gone up, but especially fertilizer. It is concerning for the next generation because they likely do not have the balance sheet strength of some of our more mature farmers. Talking a young person into getting into agriculture right now concerns me, because what would make you want to do this? When you are looking at not being able to make a profit or not planting the crops you normally plant because of fertilizer prices, we must do something to try to stabilize this market and make it more profitable.
Ranking Member Klobuchar: What are some unique challenges fertilizer companies are facing with these supply chain disruptions? Rosenbusch: We are competing as a free market in the U.S. with a significant amount of manufactured fertilizer from countries with state-controlled enterprises. China has almost half of the world’s phosphate supply. When they decide to keep all that for domestic consumption, that is driving market trends more than any other factor right now. It is their internal government policies.
Ranking Member Klobuchar: What are the challenges in creating a novel fertilizer production facility? Westling: The biggest challenge is the upfront capital requirements on projects that get to a certain scale. In this industry, because so few facilities have been built, there is a lack of expertise. In our project, we will spend $50 to $100 million before we sign major construction contracts.
Senator Marshall (R-KS): What is the purpose of the current countervailing duties on Moroccan phosphate imports if the largest U.S. phosphate supplier is shutting down plants and reducing domestic supply? Are farmers not now being squeezed by both declining domestic production and restricted imports? Rosenbusch: It is an interesting topic that will be the hot topic going forward. I cannot speak to a specific company’s business decisions. TFI remains neutral on that specific case.
Senator Marshall: Does TFI support free market competition in fertilizer pricing? Does TFI believe American farmers should pay above market prices to protect a single company’s market position? Rosenbusch: There is no question that farmers are going through a really difficult economic time, and TFI supports policies that promote an open, fair, predictable, and transparent trading environment. Farmers need access, and TFI member companies are committed to ensuring they have supply, and that it aligns with global market conditions. In many cases, the U.S. market is treated at a bit of a discount right now, almost $100 to $150 cheaper than what Brazil pays for its phosphate. The commitment U.S. fertilizer suppliers have is to the farmer, to provide an affordable, abundant supply of fertilizer.
Senator Marshall: Do U.S. farmers deserve access to the lowest cost, highest quality fertilizers available regardless of where they are produced? Rosenbusch: We 100 percent agree that bolstering the domestic supply of fertilizer is incredibly important to deliver the fertilizer U.S. growers need to be profitable.
Senator Grassley (R-IA): As a consumer of fertilizer, how much insight do you have into the price of the fertilizer you use? Would more transparency, knowledge, and data on fertilizer prices be beneficial to you? Is there any reason the fertilizer industry may not want a study to be published by the USDA? Kubik: We get a lot of that from our retailer, and our retailer gets a lot of that from the wholesaler, and we are going off things we hear in the news and then coming to them. That is why we are big on the Fertilizer Price Transparency Act and the Fertilizer Research Act. We need to see more data and more trends. We like to purchase our fertilizer in the summer prior to the growing season, so this summer, many farmers will be purchasing fertilizer in June and July for the next growing season. We have a lot of uncertainty about whether that trend is going to remain the same. Even if prices are too high, at least we would know how and why and can predict more about what they are going to do. It would be huge. It is one piece of the puzzle in trying to figure out this market. Not one that I can think of, and I heard comments today that they are supportive of transparency. It sounds like, with their support and ours, we can hopefully get these bills across the finish line and start collecting this data.
Senator Grassley: Does TFI support a report that provides insight to farmers on why they have paid certain prices for fertilizers, including factors such as market concentration? Rosenbusch: We support transparency. Farmers need more information to understand markets and prices, and USDA can play an important role in explaining that. The more we can do to invest in providing that market information, the better it will be for growers to make those decisions.
Senator Fischer (R-NE): What types of safeguards do you believe should be put in place to ensure that new infrastructure projects are not going to be resold or contribute to consolidation? Westling: I would like to think that there is a way to create exclusions or prohibitions from trading, consolidating or putting these types of projects in the hands of those you do not wish for them to be in.
Senator Fischer: What are the current regulatory challenges existing companies face when trying to bring a new domestic fertilizer facility online? Rosenbusch: It is hard to build new capacity in this country. One recent ammonia plant took seven years to permit and over $25 million just to permit it. That is $4 to $5 billion of capital. A phosphate mine took over a decade and $32 million to permit. That is all about the federal permitting process across multiple agencies. Once you get into production, the regulatory challenges add cost to manufacturing. Phosphogypsum, a byproduct of phosphate fertilizer, has to be stacked and costs over a billion dollars a year just to maintain the stacks.
Senator Warnock (D-GA): Do you expect fertilizer prices to go down this year? Rosenbusch: I do not know that I can legally predict what is going to happen to the price of fertilizer, but we are very concerned about phosphate, with sulfur costs now over $1,000 due to the restriction of sulfur coming through the strait. We are at a point where sulfur costs alone are significantly higher than phosphate costs, and you have seen phosphate mines around the world start curtailing production because of that price impact.
Senator Hoeven (R-ND): How can precision agriculture and ag-tech innovation help reduce fertilizer use and lower input costs for farmers in both the short and long-term, and what is needed to ensure farmers can adopt and utilize these technologies more broadly? Kubik: In terms of what precision agriculture can do, a lot of farmers are already using it, especially in fertilizer application. Many of us have our fertilizer applied by our retailer, who uses state-of-the-art machines with variable-rate technology. It is one of our goals to use less fertilizer and maximize its efficiency; Melton: Research and development is one of the most important things. We must continue investing in research and development into these technologies.
Senator Hoeven: How can the U.S. expand domestic fertilizer production, including coal-to-fertilizer projects, to increase competition, reduce reliance on foreign imports, and lower fertilizer and transportation costs for farmers? Westling: The plan is that if the demand is going to be there, and it is, then increase the supply, because that should lower the costs. Providing incentives for these projects at the front end of the process and helping attract capital through greater certainty could encourage additional investment. Those types of incentives could help drive the development of more projects.
Senator Hoeven: What do we do in the short-term to get more competition and bring fertilizer prices down? Rosenbusch: It is difficult right now when countries all over the world are driving up prices by subsidizing and paying high prices. I agree that the administration has taken steps to incentivize the bolstering of domestic supply, and we need that. Whether it is permitting reform, addressing the fact that some of the equipment required to build plants like the one in Nebraska has to be imported and currently faces tariffs that are driving up the cost of construction, or the things like Jones Act service exemptions to make sure we can get fertilizer delivered, prioritizing fertilizer for domestic supply, and delaying some plant turnarounds to make sure we are optimizing supply coming out of existing plants.
Senator Moran (R-KS): Has the closure of the Strait of Hormuz affected global phosphate access and fertilizer markets, given its impact on sulfur supplies and liquefied natural gas (LNG) exports that are critical to phosphate production? Rosenbusch: Sulfur is a big issue currently. The spot market is trading at up to $1,300 per metric ton, and much of that is being bought by China for copper mining. When looking at copper at roughly $16,000 per metric ton to sell, that is where the free market is going to take a lot of that product, rather than into fertilizer production. This will continue to be a challenge heading into the 2027 crop year. We support the idea of bringing more supply to the U.S. farmer. We have 108 companies that supply nitrogen to the U.S., 38 companies that supply phosphorus, and sixteen companies that supply potash. The double-edged sword is that you then expose yourself to some of these geopolitical events. We need to boost domestic production while also continuing to identify reliable global sources.
Senator Moran: While tariffs may encourage domestic production in theory, they also raise input costs. Have tariffs resulted in any measurable increase in domestic production? Rosenbusch: This is a challenging topic because long-term, when you start to put non-free-market measures in place from a policy perspective, we understand that is going to have a worse consequence on supply for the U.S. We saw that with Venezuela, where we have now opened that market, but that product is going to go to wherever farmers are going to pay the most, which is Brazil right now. If we artificially affect the U.S. market, we will not be able to attract supply here in the future.
Senator Moran: Why are we being outcompeted? Why is somebody else more capable of paying the higher price? Rosenbusch: It is because foreign governments are driving up the price through subsidies. Ethiopia is bidding for a very limited supply right now, and India is paying nearly $1,000 a metric ton, which they subsidize to their farmers. That sets the floor price and therefore sets the global market price.
Senator Moran: If the Strait were open tomorrow, what would happen? Rosenbusch: Obviously, you are going to see an impact, and we need those vessels that are behind the strait to come through. It is going to take a while for that market to work itself out, because roughly forty plants in the region have either been curtailed due to a lack of natural gas or were hit by missiles or drones.