New economic analysis raises concerns over proposed nitrogen tariffs
A new economic analysis from Texas A&M University sounded the alarm bells for corn growers concerned about rising input costs.
Commissioned by 21 state corn organizations, the study found a historic correlation between corn prices and fertilizer prices.
“These lines overlap, which means that the prices of fertilizer and anhydrous ammonia have been moving at the same rate as the price of corn for some time, and more now than in the past,” said Joe Outlaw, principal investigator. for study.
From late 2020 to October 2021, farmers saw anhydrous ammonia prices rise by $ 688 per tonne. A petition by CF Industries for the United States International Trade Commission to impose tariffs on nitrogen fertilizers from Trinidad, Tobago and Russia could push prices even higher.
“If the tariffs create a supply shortage, it will increase costs even further,” said Chris Edgington, Iowa corn grower and president of the National Corn Growers Association. “Our request is simple. We are simply asking these companies to steer clear of their trade disputes and do everything possible to keep their products available and affordable for family farms.
For corn producers, a tariff increase in input costs could be detrimental.
“If the country’s export of nitrogen to the United States caused economic harm, I could understand a tariff,” said Jay Schutte, a farmer from Missouri. “I very seriously doubt that they will suffer any economic harm, but the American farmer certainly suffers, and that will spill over into the consumer market as well.”
If continued cost increases leave farmers unable to afford fertilizer, a corn shortage could loom on the horizon, warns Schutte.
“In the United States, we have a lot of supply chain issues. We could definitely set the stage for having supply chain issues next year with corn shortages, ”Schutte said. “We can only control a number of factors in the growth cycle. The two main factors limiting corn yield are the amount of nitrogen we put in and the amount of rain we receive. We certainly can’t control the rain, but we can control the nitrogen that we apply.