The family farm has been in the crosshairs of many affronts. From trade to input costs and even Mother Nature not being its kindest this past year.
That’s why corn farmers certainly welcomed a win this summer when the U.S. International Trade Commission (ITC) issued its ruling against imposing tariffs on nitrogen fertilizers imported from Russia and Trinidad and Tobago.
CF Industries requested the tariffs on imported nitrogen fertilizer, claiming losses. Meanwhile, farmers across the country experienced skyrocketing prices for the product.
How much of an impact was this for Texas farmers? The Ag and Food Policy Center at Texas A&M University (AFPC) recently completed a study identifying the urea ammonium nitrate solutions (UAN) price impact of just the threat of these tariffs had on corn farmers.
The study – which was funded by Texas Corn Producers (TCP) and other state corn organizations – determined an additional $13.89 to $27.79 per acre was spent by corn farmers until the ITC ruling eliminated impending tariffs.
On Texas’ 2.3 million corn acres this year alone, that equates to $31.95 million to $63.92 million from farmers’ bottom lines.
TCP worked judiciously with fellow state corn organizations to advocate against these tariffs: pooling resources, funding studies and actively ensuring the farmer’s perspective was heard on this important matter.
The state’s corn and association boards recognized the need to advocate for its farmers as fertilizer costs that account for approximately 36% of a farm’s operating expenses climbed. With our Texas farmers among the first in the nation to prepare their fields to plant, the matter became quickly apparent statewide.
TCP had reports of farmers from South Texas to the Panhandle who saw an astonishing 264% increase in the cost of nitrogen fertilizer alone in just over 2-years. TCP saw the need to work together to call attention to the issue that posed harm to the viability of family farm businesses.
TCP worked with fellow state corn organizations to commission a study through AFPC on nitrogen fertilizer costs and the impact on farms released that was released at the beginning of the year. The analysis eyed several concerning factors that appear to drive fertilizer prices.
The AFPC historical analysis went back to 1980 and found that fertilizer costs tend to go up when corn revenues increase. Notably, these prices tend to go up exponentially even after accounting for natural gas prices and higher demand. The study also showed that four manufacturers account for approximately 75% of the total domestic nitrogen fertilizer production. While the correlation of nitrogen fertilizer prices with the price of corn could nod to increased demand for nitrogen products as corn prices rise, it could also be “due to the exercise of market power by nitrogen product manufacturers,” according to the study.
TCP and fellow corn organizations worked to share the findings from this study, as well a one the groups commissioned on phosphorous fertilizers with the ITC, legislators, media and other decision makers.
These efforts proved fruitful this summer with ITC’s ruling against imposing tariffs.
If even a portion of the additional $13.89 to $27.79 per acre spent by corn farmers until the ITC ruling eliminated impending tariffs, corn farmers have more than made back any investment with their TCP checkoff and membership dollars this year.
This is just one example of a tremendous win for farmers made possible by the state’s corn checkoff and association. TCP continues to advocate on this and other input cost issues. It’s also ensuring the farmer’s voice is heard on other matters, including the looming threat of Mexico’s ban on certain corn imports and looking ahead to the next farm bill.
Visit TexasCorn.org to find out more about how the Texas corn checkoff and association advocate, educate, research and promote on behalf of farmers.
