May 28 - The U.S. Federal Trade Commission said on Thursday it has been conducting a comprehensive industry-wide review of fertilizer prices after costs climbed sharply, adding pressure on farmers already contending with drought and rising fuel bills.
FTC Chairman Andrew Ferguson said in a recorded discussion with Texas farmers that the agency ‘‘some time ago commenced a major industry-wide investigation into the precipitous rise of fertilizer prices in this country, which has affected so many of our nation’s farmers.’’ The agency later confirmed the chairman's remarks.
Officials said the probe has included the use of civil investigative demands, an administrative tool that allows the FTC to require companies to produce documents and testimony as part of its fact-finding. The agency did not provide further details about the scope or timetable for the investigation.
Among the fertilizer companies named in reporting on the matter, CF Industries, Mosaic and Nutrien had no immediate comment when contacted about the FTC inquiry.
Why prices jumped
The recent escalation in fertilizer prices has been linked in part to disruptions in the Middle East, a significant production hub for many fertilizer products. Much of global fertilizer commerce normally transits the Strait of Hormuz, and shipping there has been interrupted since late February.
Those disruptions have been reflected in sharp price moves for key inputs. Prepared testimony submitted by the Kentucky Farm Bureau to a U.S. Senate agriculture committee reported that prices for urea - a major fertilizer produced in the Gulf - rose 55% since the strait's closure. The farmers' group also said prices for another nitrogen-based fertilizer climbed 33% over the same period.
FTC officials highlighted broader data indicating fertilizer has been the single largest source of increased input costs for U.S. farmers since 2020, a trend the agency said "our nation, much less our farmers, can continue to ignore." The U.S. Department of Agriculture has stated that the Biden administration focused on boosting domestic fertilizer production to counter rising costs.
Impact on growers
Producers are reporting tangible strains. A survey by the American Farm Bureau Federation found that a majority of farmers last month said they could not afford to purchase all the fertilizer they need for the current growing season. At the same time, many growers across the U.S. Plains are battling a re-emergent drought, compounding input cost pressures and squeezing margins.
"A fertilizer cartel has squeezed American agriculture to the breaking point, while driving up grocery costs for every family in this country," Aaron Martinka, chairman of the Texas Corn Producers, said in a statement. "Farmers are fed up, and we are not going away."
Some farmers face a fourth straight year of narrowing margins as they plant corn and other crops while input and fuel costs remain elevated.
What the investigation entails
The FTC has signaled that its inquiry is broad, employing civil investigative demands to compile documents and testimony from industry participants. The agency's comments did not specify individual companies targeted by the demands or any potential enforcement actions under consideration.
Regulators and farm groups say they are watching price trends closely as agricultural producers make planting and input-purchasing decisions under constrained budgets.