Several farm groups have joined manufacturers from Russian and Morocco in urging a federal judge to block U.S. tariffs on phosphate fertilizers.
The American Soybean Association, National Corn Growers Association, National Cotton Council, National Sorghum Producers and the Agricultural Retailers Association claim the import duties are unjustified.
“There is no evidence in the record, much less substantial evidence, to support blaming imports for the supply imbalance,” the organizations said in a court filing.
In reality, major phosphate producers in the U.S. and Canada shut down facilities in 2017 and 2018, which reduced supplies by millions of tons annually and “dictated an increase in import supply,” the groups argued.
Aside from the facility closures, North American phosphate manufacturers geared their sales toward export markets, “further exacerbating the supply gap inside the United States,” the court brief said.
The farm organizations fear tariffs on phosphates will raise fertilizer prices and disrupt their availability, even though domestic manufacturers were responsible for their own problems.
“Agriculture production is a risky business,” the filing said. “Farmers are in a constant battle with nature, the elements, pests, and now, apparently, corporate expansion strategy.”
Last year, the Mosaic Co. — a Minnesota-based fertilizer producer — complained to federal trade authorities that Russian and Moroccan phosphate imports had been “dumped” in the U.S. below the market value to the detriment of domestic manufacturers.
“Artificially cheap debt and specific tax breaks,” as well as access to “phosphate rock mining rights on below-market terms” served as government subsidies that unfairly gave a leg up to foreign manufacturers, Mosaic claimed.
The U.S. imposed countervailing duties of 20% on phosphate imports from Morocco and 9% to 47% on those from Russia earlier this year, after the International Trade Commission determined they’d hurt domestic producers and the Department of Commerce decided they’d been subsidized.
OCP Group, a Moroccan company, and PhosAgro, a Russian company, filed a lawsuit challenging the federal government’s actions, arguing that trade regulators “gave no weight to evidence that domestic producers became unreliable” in supplying the U.S. market.
“The commission understated the impact of domestic industry consolidation and closures, while overstating subject import volume,” according to OCP. The lawsuit is overseen by Judge Stephen Alexander Vaden of the Court of International Trade in New York City.
Demand for phosphates dropped temporarily in 2020 due to a “weather-related demand shock,” causing prices to fall, but trade regulators didn’t account for this dynamic, the company claimed. “However, the commission failed to consider evidence that U.S. prices were rising before the petition was filed and, driven by global fundamentals, would have continued to rise with or without the petition.”
The farm organizations said they agree that trade regulators improperly concluded imports had caused a material injury to domestic manufacturers.
The groups argue that “trade remedy laws were never meant to punish downstream users when domestic producers elect to stop or reduce supplying the domestic market.”