The US government is considering imposing tariffs on imports of UAN nitrogen fertilizers commonly used for corn. If a trade action proceeds, it would result in constricted UAN supply and higher prices for farmers for years to come, which could have a major impact on planting decisions and production.
US fertilizer producers claim low-priced imports of UAN, short for urea ammonium nitrate, are putting domestic producers at a disadvantage. Imports account for roughly 20% of the US market for UAN. The Commerce Department is investigating UAN imports from Russia and from Trinidad and Tobago, whose combined share of the US import market has risen to 80% from 60% five years ago.
In an era of worldwide tightening supply and high demand, the United States, the largest producer of corn, is heavily relied upon to meet global needs. However, rising input costs make it difficult for US farmers to remain competitive in global markets.
Fertilizer accounts for about 35% of farm operating costs, not including labor and machinery, and farmers keep a close eye on anything that might cause fertilizer costs to increase. The US already has imposed countervailing duties on imports of phosphates from Morocco and Russia and enacted economic sanctions on Belarusian potash shipments. Also disrupting fertilizer trade flows: China has suspended exports of phosphate and urea fertilizers.
Fertilizer costs per acre across the US major field crops have been rising in recent years, but remain well below their 2012 peak. The USDA’s Economic Research Service projected in June that fertilizer prices for corn on a per acre basis would rise by 5% in 2022 from a year earlier. Corn is the most nitrogen-demanding crop, as Gro’s research analysts highlighted in this earlier Insight article.
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