Iowa Corn Growers Raise Concern Over Possible Tariff

Corn growers are raising concern after a new economic analysis by Texas A&M University shows that pending tariffs on nitrogen fertilizers will create shortages causing prices to increase.

In a release from the Iowa Corn Growers Association, lead researcher Joe Outlaw said

As part of this study, we conducted a historical analysis going 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.

According to the analysis, 36 percent of operating costs on corn farms come from fertilizer expenses.

Raising prices has farmers worried about a petition by CF Industries, a major nitrogen producer, with the U.S. International Trade Commission to place tariffs on nitrogen fertilizers from Trinidad & Tobago, and Russia.

Lance Lillibridge is the President of the Iowa Corn Growers Association

We got American companies that are asking for tariffs on products that come into the United States that helps make our crops and it's making our costs skyrocket.

What does this mean for farmers?

According to National Corn Growers Association, the proposed tariffs would create shortages that would cause fertilizer prices to skyrocket.

Back on Lillibridge’s farm, he is already seeing a price increase.

Back to my farm, my nitrogen costs went up by three times for last year. That's ridiculous. So, for example, on 1000 acres of corn, our costs went up to $125,000.  $125,000 just in fertilizer. That's insane

However, nitrogen costs are not the only culprit in the increase. The study also points to improving corn prices affecting the price of fertilizers.

According to the study, anhydrous ammonia fertilizer prices increased by $688 per ton from the end of 2020 through October 2021. But only 15 percent, or $102, of that increase, is due to nitrogen costs.