ITC votes to continue fertilizer price surveys

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The United States International Trade Commission has determined that there is a reasonable indication that imports of urea and ammonium nitrate from Russia and Trinidad and Tobago are causing material injury to the United States industry UANs and are allegedly subsidized and sold in the United States at less than fair value.

The investigation is being conducted in response to petitions filed by CF Industries Holdings, Inc. and its subsidiaries, Terra Nitrogen, Limited Partnership and Terra International. Under US trade laws, a finding of injury to the domestic industry is a prerequisite for the imposition of anti-dumping and countervailing duties.

In 2018, Russia exported 1,227,252 short tons of UAN worth $ 186,097,918. In 2020, they exported slightly less to the United States at 1,186,295 short tons, but the value was $ 137,784,739.

In our August survey of Farm Futures readers, over 92% of respondents expect nitrogen prices to rise next year. Producers expect the biggest price increase to be seen in phosphate fertilizers as trade flows continue to adjust to the countervailing tariff dispute between the United States, Russia and Morocco.

Related: Farm Futures Survey: Profit Outlook for 2022 Unchanged

In July, the Commerce Department announced the initiation of anti-dumping and countervailing duty investigations on urea ammonium nitrate from Russia and Trinidad and Tobago.

Following the ITC’s affirmative determinations, the US Department of Commerce will continue its investigations into imports of UAN solutions from Russia and Trinidad and Tobago, with its preliminary countervailing duty determinations due on or about 23 September 2021, and its anti-dumping duty determinations due on or around December 7, 2021.

If both agencies make positive final determinations – which typically takes about a year – then the Commerce Department will issue anti-dumping and countervailing duty orders on UANs from Russia and Trinidad, which will remain in place for at least five. years.

The Commerce Department notes that in the investigation of Russia, there are 11 alleged subsidy programs, which include numerous tax programs, preferential loans and the supply of natural gas, natural gas extraction rights and rights. phosphate extraction for less than adequate compensation. In the Trinidad and Tobago investigation, there are three alleged subsidy programs, which include multiple tax programs and a program to supply natural gas for less than adequate remuneration.

According to a recent Market Intel report from the American Farm Bureau Federation, economist Veronica Nigh states that since UAN solutions make up 43% of nitrogen fertilizers and nitrogen makes up 59% of total fertilizer use , this means around 25% of operating costs. can be attributed to UAN solutions. “Certainly, farmers would feel a significant increase in the costs of the UAN solution in their bottom line,” she said.

The United States currently produces UAN fertilizer and imports this fertilizer from several countries, including Russia and Trinidad and Tobago. Russia and Trinidad and Tobago together account for about 81% of UAN fertilizer imports, Nigh explains.

“If the proposed anti-dumping margins result in an increase in UAN fertilizer costs between 169.96% and 391.65% for Russia and 158.81% for Trinidad and Tobago, plus countervailing duties, production costs will increase in price. consequence for American farmers who grow corn, soybeans, cotton, wheat and other crops for the next planting season and beyond, ”she said.

Nigh explains that in recent years, fertilizer prices have risen dramatically for all major American crops. USDA’s economic research service already predicts that fertilizer prices will rise 5% in 2022 from 2021, and that’s before potential tariffs on UAN are factored in.

“If that were to happen, it would mean that between 2018 and 2022, fertilizer prices will have increased double digits for all major crops in the United States. During this period, fertilizer prices will have increased by 16.5% for cotton, 16.6% for barley, 16.7% for oats, 17.1% for wheat, 17.6% % for peanuts, 18.1% for rice, 18.6% for sorghum and maize and 18.9% for soybeans, ”writes Nigh.

“The ITC’s preliminary ruling is an important step towards leveling the playing field for US UAN producers and their workers,” said Tony Will, President and CEO of CF Industries Holdings, Inc. “CF Industries will continue to actively participate in ongoing investigations. in order to restore fairness to our highly competitive industry and ensure that U.S. UAN growers remain a reliable source of fertilizer for U.S. farmers for years to come.

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