Fall is often a time when farmers think about pre-purchasing or putting down some fertilizer in order to save a buck and some time in advance of the coming year. For late 2020, fertilizer tariffs on imports into the U.S. is changing the price dynamic and causing some uncertainty.
Russian and Moroccan fertilizer companies have been subsidized by their local governments, creating an unfair level of competition in the U.S., according to fertilizer companies, says Jake Niederer, director of sales and marketing with ADM Company.
Canada pulls from the same origin sources as the U.S. and most of the fertilizer produced in North America comes from the east coast of the U.S. and central Florida. If imports are blocked off to compete in the U.S. market — in other words putting a duty on those products — that’s going to drive the price up, he says.
Listen in to the full interview for a thorough explanation of the supply chain from Niederer; story continues below:
“We know there’s been some retail pricing in the Canadian market that’s lagging a little bit, but generally prices have increased well over $100 a tonne on phosphates,” says Niederer. “And if you’re not seeing that in your local market, you really ought to think about getting it bought, and if you are seeing it there’s really not a lot you can do about it.”
A preliminary assessment will be completed soon, around late November, about what the taxes should be on products coming in from Russia and Morocco. However, waiting on ordering decisions in November or December translates to barges and vessels arriving much later than normal, so the value chain will be under pressure.
There’s the potential for no duty to be applied, so no change to prices, an increase in prices, or a slight decrease in prices. But at the end of the day, it’s retailers, distributors and ultimately farmers taking the pricing risks.
Niederer’s advice to farmers? “Can you make money buying your phosphate at today’s prices? That will get them locked in, secure your logistics, go from a trusted supplier, that’s got good quality.”