Impact on Corn Growers from Imposing CVDs on Phosphate Fertilizer

Countervailing duties (CVDs) on phosphate fertilizer from Morocco and Russia would add between $100 and $250 per ton to the fob price of imported phosphate fertilizers.  Based on the share of the fertilizer supply from imports, pro-rated by country market share, and the total domestic and imported supply, using the two-year average 2018-2019 fob Gulf price of MAP and DAP, the entire supply of phosphate fertilizers could see a $60 to $80 ton price increase. 

This price impact could lead to an upstream $80 to $100 per ton increase in MAP and DAP fertilizer for farmers.  For an N-P-K application rate of 180-70-70, that could mean a more than $7.60 per acre increase in production costs for phosphate fertilizers for U.S. farmers. 

This would mean $10’s of millions in extra costs to corn growers across the Corn Belt and the country lowering individual farmers’ per acre returns.  According to USDA’s latest Farm Income Forecast[1] issued 2 September, total cash farm receipts in 2020 will be their lowest in more than a decade, cash receipts for corn will drop $3.1 billion, fertilizer prices will increase $1.3 billion, and farm sector “Working capital, which measures the amount of cash available to fund operating expenses after paying off debt due within 12 months, is forecast to decline 12.8 percent from 2019.”

Resources

[1] https://www.ers.usda.gov/topics/farm-economy/farm-sector-income-finances/highlights-from-the-farm-income-forecast/

[2] USDA Economic Research Service percent of corn acreage receiving phosphate fertilizer, selected States

[3] calculated from Countervailing Duties on Phosphate Fertilizer Imports Will Hurt U.S. Farmers, July 2020, The Juday Group