Nurse tanks of anhydrous ammonia line the grounds at New Century FS in Traer on Friday, March 4. -Photo by Soren M. Peterson

Iowa Attorney General Tom Miller is focusing on unprecedented increases in fertilizer prices affecting farmers.

Since January 2021, anhydrous ammonia has increased 315%. Urea has increased by 214%, liquid nitrogen by 290%, monoammonium phosphate (MAP) by 171%, and potash by 213%, according to the most recent data supplied by USDA’s Agricultural Marketing Services.

“These sudden and significant price increases warrant an analysis into the underlying causes,” Miller said. “We are not looking at any legal theory or from an enforcement point of view at this time. We want to know, to the extent possible, why this happened, what were the basic factors that caused the price increase, and whether the increases can be explained by supply and demand.”

The leadership of the Iowa Corn Growers Association approached Miller with concerns about the price increases.

“Farmers saw higher-than-average prices for corn and soybeans last year, but any profits will be eaten by increased fertilizer prices,” Miller said.

As spring planting season nears, the volatile price situation in the fertilizer industry has been a topic of discussion in many local ag cooperatives' lobbies and front offices this winter. -Photo by Soren M. Peterson

He has also discussed the issue with the leaders of the Iowa Soybean Association, U.S. Agriculture Secretary Tom Vilsack, and others.

“Farmers have faced rising input costs in recent years, including price increases in fuel, feed, seed, and fertilizer. While weather and other external factors have contributed to these rising costs, production limitations and concentration are a cause for concern. USDA is working to address these types of challenges in other parts of the supply chain through its $4 billion Build Back Better Initiative, with a quarter of that already dedicated to meat and poultry processing capacity,” Secretary Vilsack said. “We welcome the market study announced today and look forward to working with the Attorney General’s office on this effort. Farmers deserve transparency in the marketplace and to have confidence that their input costs are fair and equitable.”

As a major part of its market study, the Attorney General’s Office is partnering with Iowa State University agriculture economist John Crespi, director of ISU’s Center for Agricultural and Rural Development, who has agreed to prepare an economic summary of fertilizer markets.

Miller sent letters to the CEOs of the major fertilizer manufacturers: Mosaic, Nutrien, CF Industries, Koch Industries, and OCI N.V. (owner of Iowa Fertilizer Co.) The letters request that the manufacturers provide their reasons for the price increases.

“We would like your side of the story,” Miller wrote to the CEOs.

Miller noted that a Texas A&M study shows that since 1970, increase in crop returns for farmers tend to coincide with even higher increases in fertilizer expenditures.

“The data suggest that manufacturers are taking advantage of higher farm incomes to increase their returns, but we need more information,” Miller said.

Another Texas A&M study released in January (https://www.afpc.tamu.edu/research/publications/files/711/BP-22-01-Fertilizer.pdf) projected that fertilizer price increases would cost corn and soybean growers an additional $128,000 on average this year.

Miller’s office has had initial discussions with the staff of other state attorneys general about the fertilizer price increases. As president of the National Association of Attorneys General, Miller is focusing on consumer protection issues and has made this issue as part of his presidential initiative.

“The fertilizer increases could hit the pocketbooks of all consumers in the form of higher food prices,” Miller said. “I hope to use my presidency to draw attention to this crisis.”