▶ 0:17:24Chair Boozman: Thank you all very much for being here today. We know this hearing is being held in what continues to be a very precarious time for our economy, I would say it is a generational event.
▶ 0:17:47Chair Boozman: While input costs for our producers have been stubbornly high for the past couple years, this situation has recently become more acute as bankruptcies increase, fuel prices remain high and interest rates have yet to come down. The cost of fertilizer, the topic of today's hearing, I look forward to hearing from our witnesses about the current state of the fertilizer industry , how these high prices directly affect producers and what potential solutions exist to
▶ 0:18:21Chair Boozman: Assure stable and affordable supply of this important input. Again, this is a national security issue. This isn't a simple problem to address. Nitrogen phosphate, potassium present a complicated picture of global supply chains that have been affected by the war in ukraine, resulting in countervailing duties and the
▶ 0:18:53Chair Boozman: Recent conflict in the middle east. Today's hearing is an important opportunity to learn more about how these factors and opportunities directly impact this response. The administration has responded by waving the jones act and refocusing the fertilizer expansion program to ensure
▶ 0:19:25Chair Boozman: These programs are up and running as soon as possible. In november the U.S. department of interior announced the addition of phosphate and potash to the crucial list which will streamline regulatory hurdles and increase domestic production.
▶ 0:19:46Chair Boozman: These minerals are important to food security, which is national security are clear and this was a welcome and much-needed change. The U.S. department of agriculture secretary rawlins has continued to engage with producers and we work with our colleagues across the administration to term and what additional steps we can take to provide relief.
▶ 0:20:14Chair Boozman: Several members of this committee have proposed steps to deal with higher fertilizer prices, how they may help and what additional actions congress and the administration might take to assure reliable and accessible and affordable supply of fertilizer for our hard-working american farmers.
▶ 0:20:42Chair Boozman: With our colleagues in the house passing the bipartisan farm bill 2.0, I look forward to engaging members of this committee to ensure the senate version addresses the urgent needs of agriculture. Congress owes our nation's producers and updated farm bill. I'm committed to making that happen.
▶ 0:21:08Chair Boozman: While the proposals and solutions we hear about today may help increase production of fertilizer and bring down prices in the long term, in the immediate future congress must provide additional assistance to supplement the usda and the assistance for specialty crop farmers programs. To ensure producers have the working capital available to see them through the 2026.
▶ 0:21:41Chair Boozman: I've been working with senator homan and I look forward to the supplemental funding program. Before I turn it over to ranking member klobuchar, this includes an op-ed and cemented by the deputy secretary. Without objection, so ordered.
▶ 0:22:13Chair Boozman: I think my colleagues and witnesses for being here today and an out-earn to ranking member klobuchar for her opening statement.
▶ 0:22:21Sen. Klobuchar: Thank you very much chairman bozeman and thank you for holding this important hearing and for bringing such distinguished witnesses and in particular I would mention the farmers who have come to washington in the middle of planting season to share their perspectives, so thank you for doing that, including a number from minnesota.
▶ 0:22:43Sen. Klobuchar: As we hear from our witnesses today, I would say that farmers need policies that encourage new investment, reduce supply disruptions, and improve transparency in the fertilizer market. We know there are many reasons that fertilizer prices are astronomically high. They were high before the war started, but I will note that there is a direct link between recent escalations in this war.
▶ 0:23:13Sen. Klobuchar: In the months since the president started the war with no authorization from congress, fertilizer prices, urea has spiked more than 40%. The cost of diesel has hit near record highs and midwest states. Why will nearly half of the global urea glows through the straits of hormuz, 30% of a monia goes through the straits of hormuz.
▶ 0:23:42Sen. Klobuchar: Yet even before the war, farmers were walloped by the president's across-the-board tariffs. An analysis by north dakota state university found that ie but tariffs. Go bison. Here's what it found.
▶ 0:24:01Sen. Klobuchar: It found that the tariffs added nearly $1 billion in costs to critical inputs like fertilizer, seed, machinery, and chemicals from february through october of last year. I was at the supreme court argument and as you are well aware the supreme court found the tariffs illegal and last week the court of international trade ruled against the president's authorities to use a different statute for these tariffs.
▶ 0:24:30Sen. Klobuchar: Again, they are not targeted, they are across-the-board, and it has led to part of these problems. Just last month I was at a family farm in minnesota where I met with corn and soybean farmers who are facing escalating costs this planting season, many said stubbornly high fertilizer prices have been an issue for years in a market but little competition, some of them were able to lock-in before the war not knowing it was going to happen but others are in even worse shape.
▶ 0:25:01Sen. Klobuchar: Beyond the geopolitical challenges, there are other reasons. Farmers have a handful of domestic suppliers to choose from with little transparency about the prices that they ultimately pay. In 2024, just four fertilizer companies accounted for 77% of U.S. nitrogen fertilizer sales and all domestic potash and phosphate.
▶ 0:25:27Sen. Klobuchar: That's why I partnered with senator thune who is here with us, and farmers in our state to introduce the fertilizer price transparency act to create a mandatory price reporting structure at usda to ensure farmers and co-ops have adequate market information on fertilizer components especially at times when we see major supply chain shocks. We believe getting this information out there would be very helpful.
▶ 0:25:55Sen. Klobuchar: Aside from price transparency, we need to increase domestic fertilizer production and storage. Senator marshall who was also with us and I have introduced the homegrown fertilizer act to do just that so we can ease our dependence on imports. I know senator grassley and others on this committee have introduced other pieces of legislation to address these issues.
▶ 0:26:18Sen. Klobuchar: Acting now will ultimately help stabilize prices and give farmers the certainty they need but it is going to have to be a combination of things. Ending the tariffs or reducing them or making them much more targeted, ending this war, finding a way to resolve it so the strait of hormuz is open again, and going at this long-term systemic problem about the lack of competition in this area. Thank you to our witnesses today.
▶ 0:26:45Chair Boozman: Thank you. We will now introduce our witnesses. We are going to go to senator mcconnell to introduce our witness from kentucky.
▶ 0:26:57Senator Mcconnell: Thank you, Mr. chairman. Do you know how politics frequently refers to each other as my friend or my good friend. It is usually not true. [laughter] frequently, we say that about some of our constituents.
▶ 0:27:17Senator Mcconnell: I've got a prepared text, I will ask the chairman to put it in the record, but I want to tell you about eddie elton, we have literally been friends for decades. We have worked together on issue after issue after issue for a big part of the 42 years I have been here. He is bright as hell and he is extremely creative.
▶ 0:27:47Senator Mcconnell: A year or so ago he said I'm really concerned, about we all are, about the loss of farmland. Not only did he say he was concerned about it, he had an idea about how to make it less likely to happen, which was to give tax relief proposal for people who bought a farm if they
▶ 0:28:18Senator Mcconnell: Agreed to continue farming. For at least 10 years. I took that idea and took it in the big beautiful bill. It is law. I can tell you he's made a difference. Not only for kentucky, but also for agriculture.
▶ 0:28:48Senator Mcconnell: I wanted to come by and thank you for all you've done.
▶ 0:28:54Chair Boozman: Thank you, Mr. chairman. Senator klobuchar?
▶ 0:28:59Sen. Klobuchar: Thank you, Mr. chair. It is my pleasure to welcome andy green to the committee today, a partner at center market strategies, a bipartisan firm dedicated to keeping markets fair and ensuring a seat at the table for businesses of all sizes. He previously served as the first senior advisor for fair and competitive markets at the usda during the previous administration where he spearheaded efforts to promote competitive markets across agriculture.
▶ 0:29:30Sen. Klobuchar: He worked for the U.S. securities and exchange committee and started his career in D.C. here in the senate, so think you for joining us today.
▶ 0:29:42Chair Boozman: Senator thune.
▶ 0:29:43Senator Thune: Thank you, Mr. chairman and by the way think of her shining a light on this really important subject. I'm glad we are having this hearing. We are getting to one of the biggest challenges farmers are facing these days and that is the cost of inputs particularly fertilizer.
▶ 0:30:01Senator Thune: It's my pleasure to introduce to the committee trent kubic, not only the current president of the south dakota corn growers, but also a farmer, a rancher, along with his wife and parents. They farm near kamel, south dakota. Alongside their cow calf operation they farm. For any of you who have been to south dakota, they also have a very abundant pheasant supply.
▶ 0:30:32Senator Thune: Trent graduated from south dakota state university with a degree in agronomy. They have two sons. He stays very busy as a certified crop advisor and as a volunteer and he's a very active member of his church. I know also that he is a person, a man of great courage because he is a diehard green bay packers fan in vikings country.
▶ 0:31:01Senator Thune: Which is a distinction that we share by the way but I'm very pleased to have him here today and I look forward to hearing a south dakota perspective on this issue, so welcome. Thank you, Mr. chairman.
▶ 0:31:21Chair Boozman: Cory rosen bush serves as the fertilizer institute president and ceo where he leads advancements in the fertilizer industry. Before joining tfi, he served as president and ceo for the global cold chain alliance and worked for the institute.
▶ 0:31:46Chair Boozman: He holds a degree in international development from harvard university. At a bachelor of science degree in agriculture education. From texas a&m, that's a combination. We appreciate you being here very much. Senator fischer?
▶ 0:32:04Senator Fischer: Thank you, Mr. chairman. I'm pleased today to introduce Mr. joshua westling who is here today as a witness before this committee on a very important subject. He is leading the development of project meadowlark, a new fertilizer plant in nebraska.
▶ 0:32:24Senator Fischer: This facility is projected to produce 500,000 tons of liquid fertilizer and reach commercial operation I'm afraid not until 2029. But before working on project meadowlark, Mr.
▶ 0:32:41Senator Fischer: Westling led the development and construction of an ammonia plant in geneva, nebraska, that became one of the few greenfield nitrogen fertilizer facilities built in this country. Mr. westling, -- Mr. westling, we are so happy to see her today and I look forward to your comments.
▶ 0:33:08Chair Boozman: Thank you. Mr. green, you are recognized.
▶ 0:33:11Mr. Green: Thank you for the opportunity to testify this afternoon. We are here because the american farmer is hurting. For more than five years farmers have endured price hikes and sustain higher prices, squeezing their margins and affecting their planting choices. It is well-known that fertilizer markets are highly concentrated. Indeed, one relatively recent merger created a giant that controlled 60% of one type of fertilizer and 30% of the market for another.
▶ 0:33:44Mr. Green: Amazingly, federal trade commission economists took a victory lap to say everything is fine, that was a mistake. I hope the efforts would be pleased if they were building on the groundwork laid out previously.
▶ 0:34:14Mr. Green: Hi, sustained increases in profits should also because for antitrust scrutiny. Particularly in light of market shocks that are repeating today. To that end it may be appropriate to reconsider those recent mergers that have helped form this highly concentrated sector. Effective enforcement of the law also requires funding and staffing at agencies, including the usda. Second, more transparency would be beneficial for more accountable fertilizer markets.
▶ 0:34:43Mr. Green: Kudos to the bipartisan sponsors of legislation to enhance usda's role in providing additional transparency, including in particular as 41 52, the fertilizer transparency act of 2026. Public reporting can highlight and in some cases deter problematic trends. For example where there is a disconnect between price and underlying supply and demand. In that way, transparency can lead to beneficial outcomes for farmers even beyond the use of the information itself.
▶ 0:35:14Mr. Green: I commend the legislation for two use of modern dashboards and the ability for the data to be used for enforcement purposes. Additionally, regular public company disclosures should be preserved and enhanced as valuable for both investors and for farmers risk management. Third, investment is an important tool for enhancing competitive markets.
▶ 0:35:38Mr. Green: The fertilizer production expansion program was usda's $900 million commitment to support american-made fertilizer capacity in the face of similarly sharply increasing prices and long-term trends toward concentration. Fpep invested $78 million across 39 states. That adds up to an estimated $12 million tons of new production online and more than 1500 jobs.
▶ 0:36:24Mr. Green: It was important for these types of efforts to benefit multiple choices for farmers. Fourth, consumers can support pro-competition initiatives upstream for farmers. Clear labels for consumers help producers that actually do the hard work of delivering value-added products that consumers want. In fertilizer, opportunities may exist to align america's desire for healthy food and clean environment with competition and resiliency.
▶ 0:36:58Mr. Green: Fifth and finally research and analysis must be part of it. It helps policymakers identify trends and design interventions to restore market competitiveness. I want to highlight research and seed resiliency.
▶ 0:37:27Mr. Green: To that end, special attention will go to ensuring maintenance and staffing for the agricultural resource services for the germplasm system to avoid the loss of irreplaceable genetics including in corn. In conclusion, more can and should be done on a bipartisan basis to enhance competition in the fertilizer sector so america's farmers can compete based on hard work, smart investments, and nature's abundance.
▶ 0:37:55Chair Boozman: Thank you. Mr. kubic?
▶ 0:37:59Mr. Kubic: Chairman, wrecking member, members of the committee, thank you for the opportunity to speak today. I'm president of the firm growers association. More often than not, we are threatened by lack of rainfall. We try to apply at the start of the year to determine which does not allow us to early book or prepay our fertilizer needs.
▶ 0:38:28Mr. Kubic: In the first few months of this year we were not in addition to book ahead of time so we expected costs to be higher than normal as we would be purchasing close to higher demand levels. Despite the cost of natural gasping relatively cheaper than any fertilizer producing area in the world, the price of nitrogen fertilizer has continued to rise in concert with prices in areas with higher costing natural gas, the resulting rise shunika terry
▶ 0:38:59Mr. Kubic: Encourage expansion of production and higher capacity utilization. It has allowed manufacturers to maintain higher prices at the expense of the U.S. farmer. Last week, a bloomberg article showed record profits for fertilizer companies. When my input price goes up, my profit margin shrinks. It is unclear to corn farmers how the office it is possible for the fertilizer industry.
▶ 0:39:28Mr. Kubic: That profit industry shows that it can increase my fertilizer prices. An analysis conducted in 2024 what is the structure of this marketplace?
▶ 0:39:55Mr. Kubic: Over the past 40 years served to the farmer. By almost any measure, these are highly concentrated markets. Large manufacturers appear to have developed and owned distribution networks. Operating the distribution points and wholesalers.
▶ 0:40:21Mr. Kubic: It is important to note that vertical integration, instead our experience that the integration hazard altered in the largest fertilizer companies locking up and leveraging distribution channels and strengthening their dominant position and extracting profits from farmers and consumers. It allows even a simple act of storing the products to be turned against the farmer. It is my understanding that fertilizer manufacturers are able to park barges that hold onto inventory.
▶ 0:40:50Mr. Kubic: Under a scenario where there are only two market participants, the first could set the price for a barge of fertilizer with the second following at that price. It is easy to see how this might occur. We need the ability of manufacturers to exert pressure on retailers. There is not significant amounts of information available about wholesalers.
▶ 0:41:13Mr. Kubic: I've heard credible reports of practices that could affect farmers such as the delay in availability of fertilizer booked that it is difficult to assess what is really happening due to the opaque nature of parts of that supply chain. Two key pieces of legislation would be helpful to provide the type of data needed. The fertilizer transparency act of 2026 would increase the data available by providing public access to meaningful pricing data and to give farmers a tool to help plan for these costs.
▶ 0:41:43Mr. Kubic: This legislation will make the market for key farm and puts more transparent and make it more competitive. It may help provide data that would aid in analysis of whether market control has been used to limit the supply fertilizer. We appreciate south dakota senator john thune and wrecking member klobuchar for introducing this step.
▶ 0:42:07Mr. Kubic: In addition, the fertilizer research act allows for the study and increases transparency and would provide much-needed information to better assist to the marketplace including key data such as sectors, capacity utilization rates, and we thank chuck grassley and tammy baldwin for introducing this bill. Simply put, farmers need more competition. We think the U.S.
▶ 0:42:31Mr. Kubic: Department of agriculture deputy secretary for his significant interest in this area and call upon the federal agencies that signed the memorandum of understanding to take meaningful steps toward solutions to concentration in this subsector. Federal antitrust laws exist for precisely this reason, to promote and sustain competition, the lifeblood of our economy. Increased competition in the fertilizer space is the only thing that can deliver meaningful and durable price relief.
▶ 0:43:00Mr. Kubic: Thank you for the opportunity to be here and thank you to chairman bozeman and wrecking member klobuchar for taking up this important issue.
▶ 0:43:07Chair Boozman: Thank you very much. Mr. melton.
▶ 0:43:17Mr. Melton: My name is eddie melton and I currently serve as the president of the kentucky farm bureau. It's an honor to be with you today to speak on behalf of the farmers of kentucky and the 470 thousand kentucky farm bureau families. My family has been farming in the county since 1900 when my great, great grandfather purchased our farm. During my lifetime, I've helped bring in 50 years of crops.
▶ 0:43:45Mr. Melton: We typically raise corn, soybeans, canola, and beef cattle. My business partner and I made the decision to not plant wheat and canola due to the increased wheat and fertilizer price. These are the types of decisions farmers across the country have had to make. This hearing comes at a critical time as we assess the current state of the farm economy in the ongoing challenges facing american agriculture. Today's fertilizer price challenges do not begin with the recent conflict in iran.
▶ 0:44:17Mr. Melton: While global tensions often draw attention to input markets, prices for fertilizer have been elevated for years. Those current crisis is not due, disruptions in the strait of hormuz have beyond a doubt exacerbated the problem. The shipping disruptions.
▶ 0:44:54Mr. Melton: We have seen 25% increase in liquid nitrogen. All the while, corn prices have declined from seven dollars a bushel in 2022 to approximately $4.50 per bushel today. Meanwhile, many farmers are operating with little or no working capital, limiting their ability to manage risks or invest in future production. In the first quarter of 2026, 86 farmers have already filed for chapter 12 bankruptcy.
▶ 0:45:37Mr. Melton: The results highlight an affordable access. Roughly 78% of the respondents in the south indicated that they were unable to afford all the fertilizer they need.
▶ 0:46:05Mr. Melton: They stated they could not afford the fertilizer they needed. Addressing these challenges requires immediate and long-term action. We want to ensure they have access to get through this growing season, it is essential.
▶ 0:46:25Mr. Melton: We appreciate the efforts of the administration so far, but we call it the president and congress to do everything in their power to increase the availability of fertilizer and ease the price burdens on farmers this growing season. Over the long term, the united states must strengthen its domestic fertilizer capacity, we are grateful to the administration, especially secretary rollins and the team at usda for the work on this issue, expanding domestic production would include supply reliability and help moderate
▶ 0:46:56Mr. Melton: Place volatility over time. According to the last if farm closures and farm consolidation continue, the long term structure of american agriculture will begin to change , ensuring producers have access to affordable inputs and fair to
▶ 0:47:27Mr. Melton: Transparent markets is critical not only for their operations, but for long-term stability of american agriculture and national food security. For producers operating on thin margins, there is no flexibility to wait for longer-term solutions. That is why near-term support matters.
▶ 0:47:48Mr. Melton: Congress should act now to help farmers members of the committee, thank you for the opportunity to speak with you today as both a farmer and as president of the kentucky farm bureau. This committee's work is so important to agriculture and the farm economy to ensure the reliable supply of food, fiber, and fuel for generations to come. Thank you.
▶ 0:48:17Chair Boozman: Thank you. Mr. rosenbusch.
▶ 0:48:23Mr. Rosenbusch: Thank you. The fertilizer institute represents manufacturers, wholesalers, and resales who serve america's farmers. There are over 500 producers of fertilizer globally and the united states is one country who have more than 20 unique companies to produce different fertilizers. Thank you farmers because without farmers there would be no fertilizer industry.
▶ 0:48:53Mr. Rosenbusch: I grew up in a small texas town where my dad was my ffa advisor and it was really ffa that broadened my horizons to leave rural america and moved to indonesia where I spent three years helping small, older farmers. It was really that experience that shaped my view on agriculture. Whether you farm in indonesia or iowa, farmers are highly exposed to global markets. Fertilizer is one of those global markets.
▶ 0:49:19Mr. Rosenbusch: Which is not a single product, but they are typically represented by three macronutrients. Nitrogen, phosphate, and potash, each with its own unique market dynamics. The united states does have significant production of nitrogen and phosphate. What we do have some potash production, we import over 98%. U.S. only accounts for 7% of total global fertilizer production and we are a net importer of fertilizer.
▶ 0:50:04Mr. Rosenbusch: The infrastructure helps support strong supporters for both domestic and international suppliers to the market, so please hear this. Fertilizer is a globally traded commodity that is subject to fierce competition in global supply and demand. To understand that supply and demand, we really have to begin with geopolitics, starting with iran.
▶ 0:50:28Mr. Rosenbusch: The closure of the strait of hormuz impacted about 34% of globally traded urea, 20% of phosphate, and half of the world so for exports. Iran itself is actually the second largest exporter of urea with about 12% of the marketplace. 20% of the natural gas is supplied from the region, and natural gas is the feedstock for all nitrogen fertilizer. But the strait is really only part of the story.
▶ 0:50:56Mr. Rosenbusch: There have been 31 ammonium plants in the region that have curtailed production or been damaged during the conflict. Another 39 plants in india or asia were shuttered due to disruption. Even with the straight reopening , we do not know the extent of the damage to those production facilities.
▶ 0:51:20Mr. Rosenbusch: These issues exacerbated what was already a tight global supply. China is the world's largest producer of fertilizer with about of a third of all nitrogen production and 43% of the global phosphate supply are currently restricting all of their experts. 20 nitrogen plants have been damaged due to ukrainian drone strikes and russia has implemented an export band or restriction on their fertilizer.
▶ 0:51:50Mr. Rosenbusch: At the same time, we are also experiencing strong demand for fertilizer. For example, in india, the world's second-largest consumer of fertilizer behind china, their federal government procures their fertilizer, they then heavily subsidize it to keep prices low for their farmers. Because of the significant volume of urea was stranded behind the strait, india recently did another urea tender for 2.5 million metric tons of urea at nearly $1000 per metric ton.
▶ 0:52:21Mr. Rosenbusch: We recognize that this is a very challenging and frustrating time for our farmers, that are already experiencing very low crop prices. That is why we would like to be a partner to develop solutions. We support policies that bolster domestic supplies. Ammonia facilities can cost $5 billion to build or a decade or more for development of a potash or phosphate mine.
▶ 0:52:51Mr. Rosenbusch: We also support transparency. Farmers need a reliable support of data and market information. We have proposed the creation of a crop input economist at usda that can analyze price information and supply factors to aid farmers in their decision-making. So while we cannot directly influence prices.
▶ 0:53:28Chair Boozman: Thank you. Mr. westling.
▶ 0:53:33Mr. Westling: Chairman, ranking member, committee, thank you. Thank you for the introduction. My name is joshua westling, the founder and ceo of j. Westling & co., llc, and I'm leaving the production of project meadowlark in nebraska. I want to give you a candid view from the front line of fertilizer production.
▶ 0:53:57Mr. Westling: Six years ago I started working on this project because the fertilizer supply in a region was getting worse and no one was solving it. Nebraska is consistently one of the largest purchasers of fertilizer, yet local production of nitrogen fertilizer is minimal relative to what we can soon.
▶ 0:54:33Mr. Westling: Once it reaches operation, it will produce 52,000 tons, the plant is fully integrated, we produce ammonia as an integrated. The product our farmers and truckers actually use. This is the second greenfield nitrogen plan I have developed.
▶ 0:54:58Mr. Westling: When it came online in 2018 it was one of only three greenfield nitrogen fertilizer plants of meaningful scale built in the united states and over 30 years. Project meadowlark will be the fourth. My team and I have done this before. The total budget for this project is over $1 billion, we have raised over $50 million, the substantial majority from our partners and members of our community.
▶ 0:55:24Mr. Westling: These other people who understand the supply problem most directly because they live it every season, they have always believed the federal government should have a role in solving this problem only responds to crises so they took the initiative. I'm honored and humbled by their support and I take seriously the responsibility to deliver what we said we would deliver.
▶ 0:55:47Mr. Westling: When farmers are putting their own capital to restore domestic fertilizer production that is essential to our farm and food security, that is rural america trying to tell you something. One challenge you need to fertilizer projects is that so little domestic capacity has been built over the last several decades. Unlike sectors such as power generation there are relatively few products to rely upon.
▶ 0:56:18Mr. Westling: Work is required before large-scale private capital can move with confidence. Early-stage funding through any number of mechanisms is one of the biggest areas we are pursuing. I support the framework announced by secretary rawlins, sec. Lutnick, administrators eldon as a serious response to a serious problem and this is exactly what this moment requires.
▶ 0:56:44Mr. Westling: If domestic fertilizer production is strategic infrastructure, we need to treat it like infrastructure. First, predictability and execution certainty. Federal timelines must operate with the urgency this requires. Clear and predictable timelines allow private capital to move faster on strategically important projects.
▶ 0:57:16Mr. Westling: Second, coordination across agency and programs. When agencies operate independently, delays compound and timeline stretch unnecessarily. Better coordination would accelerate the deployment of private capital to domestic capacity. Third, urgency. Of congress and the administration leave domestic further reduction -- fertilizer production is necessary, we should act like it.
▶ 0:57:42Mr. Westling: Every year of delay supplanting cycle exposed to fragile supply chains. The faster strategic federal support becomes real and deployable, the faster new domestic capacity comes online. Three years from now, the measure of success will not be how many frameworks were announced or how many hearings were held, it would be whether capacity came online in the united states. This committee as the opportunity to help ensure projects like ours move fast enough to matter.
▶ 0:58:11Mr. Westling: I'm grateful for your attention and for the bipartisan seriousness this committee has brought to the problem. I look forward to your questions, and thank you.
▶ 0:58:19Chair Boozman: Thank you very much. We are going to go through our rounds of questions. I will allow senator thune to take my place in the order. We appreciate the fact that even though he is the majority leader, he is one of our most active members. He hasn't forgotten his roots. [laughter]
▶ 0:58:38Sen. Thune: Thank you, Mr. chairman, and you can count on that. Thank you for your leadership on this and thank you for taking on this issue. We need to get a 15 done. It's also couple of important problems. One of which is demand for corn in this country at a time when we are losing export margins.
▶ 0:59:05Sen. Thune: And increasing fuel in this country when gas prices are going up. As an economic matter it makes all the sense in the world. I want to thank all of our panelists for being here today.
▶ 0:59:32Sen. Thune: It's important that congress support the long-term solutions. I'm proud of what we did with the working families tax cuts to improve crop insurance protection and update disaster programs, but I will say that remains more to be done and all of the members of this committee know that rising input costs have been eating into producer bottom lines for the last several years. I would add the price of fertilizer particularly.
▶ 1:00:00Sen. Thune: The steep increase would eliminate profit margins during commodity prices so it needs to be addressed. Mr. kubik, would you elaborate on how the price you have paid for nitrogen in phosphate fertilizers have changed over the years and how that impacted your planting decisions over the last few years?
▶ 1:00:22Mr. Kubik: Thank you for that question. I got a little bit of ptsd from 2022 and I must have blacked it out from my memory because 350 dollars for a ton of urea. By 2022, that price jumped to $830.
▶ 1:00:51Mr. Kubik: 2023 and 2024, $400, $500, $600 range. It doesn't take a sharp pencil to figure out that is not sustainable to be profitable. If we look at phosphates, $435. Jumped to $1100 on and has stayed consistently high. It stayed in the $700 to $800 range. We have applied less because of it.
▶ 1:01:21Mr. Kubik: In 2025 we did not apply any phosphate on our arm -- farm because it did not make an economic risk. We are hoping we can catch up in the future years if it gets cheaper. When we have world events that happen, that completely blow that out and really exacerbate the problem and we feel it. This has been a long-standing problem.
▶ 1:01:45Sen. Thune: It predates current events, but this is something that is contributing and there are structural things that need to be addressed, which is why we have some of these transparency bills. Could you share your experience with the recent shortages, intro to kill her the shortage of nitrogen in south dakota?
▶ 1:02:04Mr. Kubik: We have not experienced a shortage of nitrogen yet. For our spring needs, the nitrogen fertilizer has been there. A lot of the stuff was in country before the events happened. Around the world. We are starting to have worries about what we do in crop and as we look forward to 2027.
▶ 1:02:28Sen. Thune: As we know a small number of producers have the lion share of production. I would like to ask this share. What project -- percentage of sales for potash come from other than the largest U.S. companies. >> thank you for that question. Each market is very different.
▶ 1:03:01Sen. Thune: I will start with potash. Only about 2% of our manufactured product represents the market here. When you look at nitrogen it depends on each of the different products. Ammonium we have a large percentage of U.S. domestic producers. We have 18 different companies that make up about 80% of that. When you get to phosphate about 60% of our domestic manufacturers represent the market share in the united states.
▶ 1:03:33Sen. Thune: It depends on each of those and when you think about the total market for the united states it's not just the domestic produced product but also the imported product to serve the needs.
▶ 1:03:46Sen. Thune: Mr. chairman, my time has expired but I would like to submit a couple questions for the record.
▶ 1:03:52Chair Boozman: Without objection. Senator klobuchar.
▶ 1:03:59Senator Klobuchar: Thank you, Mr. share. Mr. kubik, and marched in a leader soon -- in march, leader thune and I introduced the price transparency of fertilizer components. Could you talk about how price transparency in the fertilizer market helped farmers like yourself gain insight into the market and make informed financial decisions.
▶ 1:04:29Senator Klobuchar: And how does that contribute to the market we are in?
▶ 1:04:33Mr. Kubik: It would be huge. We just want to understand the market. When the price of fertilizer is so high we keep asking ourselves, why is it so high? This one little event a couple of months ago was easy to point to, but leading up to that nobody knew that answer. We just want transparency so we can understand how we purred allies -- purchase our fertilizer.
▶ 1:05:05Mr. Kubik: How one of our main input components is priced.
▶ 1:05:07Sen. Klobuchar: You spent some time during the last administration looking at competition challenges in fertilizer and other input markets, Mr. green, could you talk about some of your findings back then?
▶ 1:05:19Mr. Green: Well, we did a request for information around fertilizer, your question is focused on fertilizer. We did a lot of different things but on fertilizer we did request for comments and we did a summary of that. It was made available. It really found, this was end 2002, 2003, so many of the trends you were hearing today were entirely present then.
▶ 1:05:48Mr. Green: These have been building up for a number of years but these are a small number of choices, high concentration, high prices, prices that follow the price of corn, rather than the price of the supply and demand for the actual product itself or supply and demand for the inputs into fertilizer itself. That really just raises questions.
▶ 1:06:12Mr. Green: There are some reasons why it might be connected, but the extent of the connection is really a focus of concern. We made all of that public, hundreds of comments, we would be happy to share that with your office.
▶ 1:06:26Sen. Klobuchar: Thank. Mr. melton, you mentioned the war and many of our farmers have found themselves stuck with higher costs right before the planting season or during an actually, which was requested in your farm bureau fertilizer survey, 50% of the respondents reported, how will these costs affect the next generation of farmers that are trying to get started that maybe don't have the margin or the savings of
▶ 1:06:58Sen. Klobuchar: Some of our farmers who have been around a while?
▶ 1:07:07Mr. Melton: We have probably seen four years of balance sheet deterioration. For years where prices have declined an our inputs have gone up, but especially fertilizer here. It's concerning about the next generation because they probably don't have the balance sheet strength that some of our mature farmers would say and it is very concerning. Actually talking a young person into getting agriculture right now is concerning to me because what would make you want to do this.
▶ 1:07:35Mr. Melton: When you are looking at not been able to make a profit or not planting the crops you normally plant because of fertilizer prices, we have to do something to try to stabilize while being more profitable. We have to get farmers back to profitability.
▶ 1:07:56Sen. Klobuchar: Agreed, thank you. Quickly, Mr. rosenbusch, can you talk more about the unique challenges fertilizer companies are facing with the supply chain disruptions? You mentioned some things internationally I didn't even know about so if you could be fast.
▶ 1:08:13Mr. Rosenbusch: I think I would just summarize it by saying that we are competing as a free market in the united states with a significant amount of manufacturing in fertilizer where you have state-controlled enterprises.
▶ 1:08:32Mr. Rosenbusch: I reference shyamala all have roles phosphate and when they decide to keep that for domestic consumption, that is driving market trends more so than any other factor, their internal government policies.
▶ 1:08:44Sen. Klobuchar: Thank you. Mr. westling, thank you for being here. Senator marshall and I introduced a bill to get a grant and loan program at the usda to help domestic fertilizer companies to alleviate some of the concerns your previous witness mentioned. To get into financing, what are the challenges in creating novel fertilizer protection facility like project meadowlark? Nice name by the way.
▶ 1:09:11Mr. Westling: Thank you for the question. The biggest challenges in the projects so few of them built, there is a real lack of expertise around it. In the case of our project for example, we will have spent $50 million to $100 million before we sign major contracts for construction.
▶ 1:09:38Mr. Westling: That upfront capital cost to bridge to the point we have the certainty to execute and give certainty to other investors and lenders I would say is the biggest challenge for sure.
▶ 1:09:48Sen. Klobuchar: They can very much.
▶ 1:09:50Chair Boozman: Senator marshall.
▶ 1:09:53Senator Marshall: Thank you so much, chairman, and ranking member for your leadership in this as well. Thanks to the working family tax cuts, crop insurance and reference prices have been taken care of for the most part, but now input costs are the number one issue concerning american farmers. In fact, fertilizer costs now account up to 40% of input costs. That is now the number one issue. These input costs.
▶ 1:10:21Senator Marshall: American farmers are price takers on both ends paying for inputs and commodity prices they cannot control. With no pricing power on either side, that's not a market, it's a trap for the american farmers. I do point out that farmers -- prices for fertilizer were higher for some 18 months when russia invaded ukraine and those prices came down but of course now they are up significantly. I will speak to Mr.
▶ 1:10:49Senator Marshall: Rosenbusch first. One particular company control 64% of U.S. phosphate and they account for 90% of retail sales for farmers. It's being reported that the largest domestic supplier of phosphate is closing lance which will reduce domestic supplies while we have a 16% duty on moroccan imports on phosphate.
▶ 1:11:15Senator Marshall: So I guess the other question I would ask you, one of these countervailing duties protecting? Art farmers getting squeezed from both supplies with less domestic supply and restricted imports?
▶ 1:11:28Mr. Rosenbusch: Thank you for that question and a really interesting topic that I think is going to be the topic into the future. I can't speak for specific companies business decisions and as you are aware, those are companies that are all tfr members on opposite sides of that case that we remain neutral.
▶ 1:11:54Mr. Rosenbusch: I'm not asking you to comment on their plan but I would agree -- think you would agree that farmers are getting squeezed on both sides now. Less domestic supply in restricted imports. As the fertilizer institute support free markets? If the answer is yes you have to justify the duties that blocked the largest phosphate producers from feeding american business.
▶ 1:12:20Mr. Rosenbusch: There is no question that farmers are going through difficult times. Tfi supports open, fair, and predictable trading environments. When we think about phosphate going forward, those two raw materials to manufacture that arsenal for a casted and ammonia. With the sulfur challenges.
▶ 1:12:41Sen. Marshall: We understand all that, we understand there is sulfur that we need, that is elementary chemistry. Does the fertilizer institute support reducing the countervailing phosphate duties on morocco?
▶ 1:13:01Mr. Rosenbusch: I understand how challenging that it is because we have member companies on both sides of that case. We do not take a position on that particular case at the tfi right now.
▶ 1:13:13Sen. Marshall: American farmers paid almost $7 billion for five years because of that 16% countervailing duty. Does the fertilizer institute believe american farmers should pay above market prices to protect a single company's position?
▶ 1:13:28Mr. Rosenbusch: Senator, we are definitely, we definitely believe that farmers need access and tfi member companies are committed to ensuring they have supply and that that supply is in line with what global markets are and in many cases we have seen that the U.S.
▶ 1:13:46Mr. Rosenbusch: Market is actually traded at a bit of a discount right now, almost 150 dollars cheaper than what brazil pays for their phosphates and that commitment that I think the U.S. fertilizer suppliers have is to the farmer to get unaffordable and abundant supply fertilizers.
▶ 1:14:05Sen. Marshall: Would you agree that american farmers deserve access to the lowest cost, highest quality fertilizers available regardless of where it is produced?
▶ 1:14:13Mr. Rosenbusch: Thank you, senator. We --
▶ 1:14:24Mr. Rosenbusch: We 100% agree it is incredibly important to deliver to U.S. growers the fertilizer they need in order to be profitable.
▶ 1:14:32Sen. Marshall: Just want to reiterate the number one challenge today is the import costs and fertilizers account for up to 40% of those import costs. Trade exports are up. We exported -- we went from 2.3 to $2.8 billion -- 2.8 billion bushels of corn. The problem are the input costs. The fertilizer is the biggest chunk of those that we need to address.
▶ 1:14:58Sen. Marshall: And I appreciate again the chairman and ranking member for giving us this opportunity to discuss these. We have been working on these again since russia invaded ukraine and we need to give the american farmers relief now. Getting rid of the countervailing duties would be the quickest, most immediate impact the american farmer can see in the real world today. Thank you, Mr. chairman.
▶ 1:15:23Chair Boozman: Thank you. Senator smith.
▶ 1:15:27Sen. Smith: Thanks to all the panelists today. I want to follow up a little on senator marshall's questions because I think he is touching on something everyone on this committee cares about. You've got these skyrocketing input costs and we also have what we know to be significant market concentration and on the input side we are talking about fertilizer today. Mr. kubik. You put it clearly.
▶ 1:15:56Sen. Smith: The fertilizer companies raise prices because they can. And that is the market power that they have. And I was just looking at some data which gets at this. I'm going to come to you first, Mr. kubik. This data is a few years old. It's prices and -- in global markets based on what's going on in ukraine. We think it is different now than it was? This is from the institute of ag and trade policy in minnesota.
▶ 1:16:26Sen. Smith: They said the 21-22 time pe riod, companies made $84 billion in profits. In 2022, major fertilizer companies saw profits increased by somewhere between 100 to 200 percent. Their input costs did not go up by that much. Think about that. Profits are going up between 100% and 200%.
▶ 1:16:53Sen. Smith: How much do you think the profits of the average farmer in south dakota was going up during that time period?
▶ 1:17:03Mr. Kubik: Thank you for that question. I can tell you personally they have not gone up by 100 or 200 percent. That is what we struggle with. The cost of production. When I look at marketing my corn or soybeans or cattle, that is when I determine my marketing points. And that's where we feel taken advantage of. They can look at cause production and throw it out the window and look at a price to set it at.
▶ 1:17:28Sen. Smith: That is the price they can charge because as you said they have a power. Mosaic's profits went up 120% in that time period, nutrient, 142%. That looks like excess profit to me. Did you want to add?
▶ 1:17:50Sen. Smith: If I may. There's an article -- a copy of the article on your desk. This is not just 2, 3, 4 years ago, this is the last week. We have seen reports of massive profits. And that's what we feel the worst about. During the last 75 days, a lot of money was being made but it was not by farmers.
▶ 1:18:12Sen. Smith: In talking to minnesota farmers, there's plenty of money in agriculture, the question is who is getting? It is not farmers right now. I am fully in support of the excellent transparency laws -- bills that had been put forward, bipartisan by my colleagues. If anybody wants to comment on it, do you think those transparency laws, if they were in place now, do you think that would change the behavior of these companies?
▶ 1:18:42Sen. Smith: Because that's what we are talking about, the behavior that they have of being able to raise prices so exorbitantly.
▶ 1:18:50Mr. Melton: Thank you, senator. I think we need all the tools in the toolbox that we can use. Anything that we can do to help us get back to profitability. We have seen four years of decline in our balance sheets. This cannot continue on. You cannot keep losing money and continue with the things we are doing. I think we need every tool in the toolbox that we can use.
▶ 1:19:18Mr. Melton: Transparency in markets will give us one tool there that we can use. What we do right now -- I talked to my partner this morning about it -- we get a lot of our information from the retailer, on fertilizer right now. There are things on the internet you can go look to. But actual fertilizer pricing, you need to go to the retailer right now to see where we can price that fertilizer. It would be a good tool.
▶ 1:19:48Sen. Smith: Would you like to comment on this issue that I raised about the exorbitant profits we are seeing? He worked a lot on the question on how we can have fair markets in agriculture, on folks that are actually growing things.
▶ 1:20:03Mr. Green: I want to agree with my colleagues, you need a lot of toolkits. There is no one toolkit that will bring those down. You need -- when you do have those super normal profits community to look at the mergers and the other conduct and bring enforcement case. You have to think about the transparency toolkit and investment toolkit of supporting the new competition and new choices which is what we did in the previous administration. $778 million of investments.
▶ 1:20:33Mr. Green: And so, every single one of those as part of bringing down those super normal profits which are indication of a broken market.
▶ 1:20:43Sen. Smith: I agree with that completely. My time is up, Mr. chair. The question is what can we do to change the behavior of companies that are in a position where they can charge such high prices and get such exorbitant profit? In some sectors, we look at a windfall tax, something to change behaviors so we make the market more fair for the folks doing the work. Thank you.
▶ 1:21:08Chair Boozman: Thank you. Senator grassley.
▶ 1:21:12Sen. Grassley: Before I asked the first question, I want people to know that there's at least one other center with the questioning that senator marshall put forward, and 20, countervailing -- in 2021, countervailing with moroccan phosphate.
▶ 1:21:35Sen. Grassley: He studied -- a study found farmers paid nearly $7 billion in additional costs between 21 and 25 growing seasons because of countervailing duties. Msoaic has 80% -- mosaic has 80% of the market in the united states. Yet if you like the need protection from 18% tariffs on morocco phosphate coming into this country.
▶ 1:22:04Sen. Grassley: Tiwahe has tried to help -- trump has tried to help with dollars from the U.S. treasury but what I hear even last week at 12 different counties in iowa that I toured, farmers want to get their money from the marketplace, not the U.S. treasury. I think this administration ought to get rid of that 18% tariff on morocco phosphate.
▶ 1:22:31Sen. Grassley: Lowering production costs would be as much help as increasing prices for farmers were getting money through the federal registry. Mr. kubik. For many years, farmers have felt when commodity prices increase, import prices are bound to increase with them. Since 2020, even as the price of corn has decreased, fertilizer prices have remained elevated. We know the talking points of the fertilizer industry.
▶ 1:23:01Sen. Grassley: The cause would be the ukraine, chinese export controls on fertilizers all contributing to prices farmers are facing. And increased prices, those are. Farmers have also been seeing increased consolidation of the fertilizer industry. Farmers want to know exactly why they are paying the price that they have for fertilizers. And I think we need more transparency on that.
▶ 1:23:32Sen. Grassley: For you, Mr. kubik. As a customer of fertilizer, how much insight do you have into the price of the fertilizer use? -- you use?
▶ 1:23:44Mr. Kubik: I will echo what eddie said. We get a lot of that from the retailer. The retailer gets a lot of that from the wholesaler and we are going off of things we hear in the news and then coming to them. We are still vague on the fertilizer transparency and research act that you introduce. We need to see more data and more trends.
▶ 1:24:08Mr. Kubik: We like to typically purchase fertilizer in the summer prior to the growing season so this summer, june and july for the next growing season. We have a lot of uncertainty. Will the trend remain the same? We don't have a lot of that data to look at. We need to see more of that. If it is too high, at least we know how and why and and predict more what it is going to do.
▶ 1:24:29Sen. Grassley: My second question I think you just address but more transparency and knowledge and data on fertilizer prices would be very beneficial to you.
▶ 1:24:44Mr. Kubik: That would be huge. As one piece of the puzzle, trying to figure out this market.
▶ 1:24:52Sen. Grassley: May be this next question is difficult for you to answer but is there any reason you can think of that the fertilizer industry may not want a study to be published by the U.S. department of agriculture?
▶ 1:25:06Mr. Kubik: Not one that I can think of. The comments today were supportive of transparency which is nice to hear that they support that so it sounds like with their support and our support, hopefully we can get these bills across the finish line and start collecting this data.
▶ 1:25:24Sen. Grassley: Does the fertilizer institute supporting report that provides insight to farmers on why they have paid certain prices for fertilizers and moving factors such as market concentration?
▶ 1:25:39Mr. Rosenbusch: Thank you for that question. Good to see you again. We have these conversations a few months ago when you chaired the committee. Yes, we do support transparency. We think farmers need more information to understand market prices and we believe that usda can play a very important role being able to explain the. I was at a farm on friday talking to some growers about the dynamics -- global dynamics and what was creating the price structure we have today.
▶ 1:26:07Mr. Rosenbusch: And they were very appreciative of that. I am one person and I think the more we can do to invest in providing market information, the better for growers to make those decisions.
▶ 1:26:18Sen. Grassley: My time is up. I will put the rest of my questions for answers in writing.
▶ 1:26:24Chair Boozman: Thank you. Senator lujan.
▶ 1:26:31Sen. Lujan: Thank you for calling this hearing and thank you all for being here. Had the opportunity to sit down with some farmers and ranchers in southern new mexico. And just asking what is working and what is not working. What is happening to the bottom line. A host of issues they shared with me, increased farm input costs and shortage of farm label. -- farm labor. Population. Lots of expertise at usda.
▶ 1:27:01Sen. Lujan: Someone said it is hindering the ability to get timely assistance from the united states department of agriculture. Many of the issues are larger than one administration. I recognize that. But many can be attributed to events by this president and this administration. President trump began by implementing sweeping tariffs that have closed off entire markets to american farmers.
▶ 1:27:30Sen. Lujan: Markets and relationships that we spent decades building, driving down prices as farmers across the country headed to the field to harvest their crops. Now, president trump then started the war in iran, I would argue, an illegal war, without seeking congressional approval. As a result, the strait of hormuz is close which has caused fertilizer prices around the world to skyrocket.
▶ 1:27:55Sen. Lujan: While all this was happening, president trump's department of agriculture implemented sweeping reduction in force efforts. We cannot seem to agree to empower colleges across the country that when there is not a usda inspector available, there should be someone from the state available whether they are going to look at crop yields or what's happening with drought for insurance or just get a stamp so
▶ 1:28:25Sen. Lujan: They can sell their products, I don't understand that. With the loss in his additional knowledge and talent at the agency, that creates more backlog. On top of all the pressures I was just sharing. Let me just start with this question. Yes or no. Is president trump's war in iran directly related to the spike in fertilizer prices we have seen since february of 2026?
▶ 1:28:55Mr. Rosenbusch: Thank you for that question. We have seen significant impact on the global fertilizer markets because of the events in iran. There are many factors right now that play on a global scale that are really driving what markets are, whether that be what india is doing with purchasing power right now or what china is doing to restrict exports.
▶ 1:29:17Sen. Lujan: Is that a yes?
▶ 1:29:19Mr. Rosenbusch: Senator --
▶ 1:29:25Sen. Lujan: I just point to page -- the first bullet on your testimony. The answer is yes. You justify it from the first bullet on your testimony. What is hard is stipulated to a set of facts. You bring yours, I bring mine, then we fight about them and there are no facts.
▶ 1:29:48Sen. Lujan: What this war in iran is doing, the cost of fertilizer is bs, maybe we should be talking about the kind of fertilizer that comes out of cows and sheep and using more of that in america to figure it out. But you all -- do not come in here and some of that the people back home are full of [expletive] I don't understand that, man.
▶ 1:30:13Sen. Lujan: I'm going to get some academic justification on why it is just my imagination. When I went to put diesel this weekend, I guess it was just my imagination that I was paying over $5.50 a gallon. I have a lot of questions to file, Mr. chairman. I'm sorry I got distracted here. We just want a straight answer.
▶ 1:30:43Sen. Lujan: Farmers and ranchers across the country are hurting. You know this. Whether democrat or republican. Whenever an administration is doing some thing that is punitive to the folks that we have a response ability to fight for, let's speak up. I will call the presidents -- call out the president as a republican and republican a president and democrat president.
▶ 1:31:14Sen. Lujan: Get lamb chops. Sometimes mom made an apple pie. We had milk delivered when I was a kid. It was a way you got the cream from the top into the rest of the mill. My buddies laugh at me. They say what I am doing? I'm sorry for the vernacular I am using but sometimes when you grow up on a little farm and you have to shovel in the morning to give the barn screen, you need to talk that way over here so we can connect. We can do better here and I certainly hope we can get a farm bill. That we can work together.
▶ 1:31:41Sen. Lujan: That we don't let basic arithmetic get in the way of what it needs to get 60 votes to get it done, let's work together to get things done here. I'll I would ask for the panelists, let's just be straight with each other. We don't need to sugarcoat stuff. People are hurting today. Let's recognize that and let's agree to find solutions to make things better. Thank you for the indulgence.
▶ 1:32:01Chair Boozman: Thank you. Senator fischer.
▶ 1:32:06Sen. Fischer: Thank you, Mr. chairman. Mr. westling. Can you discuss the project you are doing in gothenburg and highlight some of the challenges that you face?
▶ 1:32:19Mr. Westling: Thank you for the question. The project we are doing is to make fertilizer that is utilized that regional geography in the state of nebraska borne from the shortage that exists and the difficulty of transporting product there were sometimes huge distances.
▶ 1:32:40Mr. Westling: In terms of the challenges faced like every large project that is not done by an incumbent or somebody with a big balance sheet to get those projects on the ground, fortunate and thankful for mostly farmers who stepped up to the plate to fund this project and/or fund the early stages of the project.
▶ 1:33:00Chair Boozman: We are some discussions around federal investments. What types of safeguards do you believe should be put into place to ensure new infrastructure and projects that have been -- that they will not be resold, which senator mcconnell talked about. That he was able to work on. Or contribute to consolidation, which is what I hear from producers.
▶ 1:33:28Chair Boozman: Sure you do out at the western part of the state, producers are worried about that consolidation and what it does to price. Any thoughts on that?
▶ 1:33:38Mr. Westling: I am certainly not an attorney and I will not pretend to know how to write bills. I will leave that to all of you. Much smarter than I am. I would like to think that there is a way to whatever form potential assistance comes in for you be able -- for you to be able to create those exclusions in putting these types of projects in the hands of a member you don't wish for them to be in.
▶ 1:34:07Sen. Fischer: Do you worry about federal regulations? Local regulations? Have you had to deal with any of that?
▶ 1:34:12Mr. Westling: We have had some regulations have had to deal with not different from most projects of this scale. We have been relatively fortunate in our state. The folks in charge of administering those regulations or enforcing them have all been very reasonable to work with. And to the extent the federal level where we needed them to weigh in, blessed by the fact that those folks have been reasonable to work with as well.
▶ 1:34:43Sen. Fischer: Thank you. As many of my colleagues have shared, fertilizer availability and the prices are atop farmers' minds across the country and that includes my friends in nebraska. For years the united states has been reliance on foreign fertilizer production to meet that domestic demand.
▶ 1:35:06Sen. Fischer: With a lot of talk around the need to increase domestic production, can you share the current regulatory challenges that exist in company space? On boarding a new fertilizer facility in the U.S..
▶ 1:35:24Mr. Rosenbusch: Thank you for that question. Josh did an outstanding job of explaining that.
▶ 1:35:28Sen. Fischer: You feel it is pretty good to deal with?
▶ 1:35:32Mr. Rosenbusch: It is really hard to build new capacity in this country. One recent ammonia plant took seven years to permit and over $25 million just to permit it. Not event to start construction. We are talking 4 to 5 billion dollars of capital. 32 billion dollars just apartment. That is across multiple agencies.
▶ 1:36:00Mr. Rosenbusch: When you think about production itself, once you get into production, regulatory challenges that add costs to manufacturing, you've got the byproduct of phosphate fertilizer that has to be stacked and costs over a billion dollars a year just to maintain those stacks. There are a long list of regulations we would be happy to share with you of things that can be done to bolster domestic supply.
▶ 1:36:24Sen. Fischer: Thank you. So nice to see you here, Mr. kubik. Can you take a minute to discuss the role that precision agriculture has, met new technology that is out there, and the increased approval we are seeing in the bio based products that they can have in providing additional options to growers and ag producers faced with the uncertainty they have now with fertilizer?
▶ 1:36:52Mr. Kubik: Thank you for that question. It is something I am very passionate about. Coming out of college with that degree, we are looking to better ourselves, that can be said for all farmers, we are trying to do what is best for the lamb because we want kids in our grandkids -- land because we want kids and our grandkids to farm on that land.
▶ 1:37:15Mr. Kubik: We are very precisely applying parts of the field are getting more than other based on testing and making sure we are doing everything exactly like we should. The biological space has definitely garnered a lot of attention with the increase in fertilizer. I will be trying a couple of different ones on my farm. Have tested multiple different ones. The problem with that unfortunately, we live in a reality and they are not enough right now to rely on.
▶ 1:37:44Mr. Kubik: We still need fertilizer to grow crops. And we are hopeful -- I dream of a day where I don't even [indiscernible] anymore. That would be the best thing ever. I don't know of my grandkids will experience that. But if we put it on accurately, that would be great.
▶ 1:38:05Chair Boozman: Senator warnock.
▶ 1:38:09Sen. Warnock: Thank you very much, brother chair. I'm sure you know the top state for farm bankruptcies last year was your home state of arkansas. The number two state was georgia. So we are dealing with the same issue. I am sure the chair and I agree that while we like to see our state's leading, we don't want to be leading in this way.
▶ 1:38:35Sen. Warnock: Farm bankruptcies increased 46% last year due largely to the president's trade war. I wonder how many more farmers may go bankrupt by the end of this year because of president trump's war in iran. War that is raising fertilizer and fuel costs as we all know, due to the closure of the strait of hormuz, which anyone paying attention could have predicted. Mr. rosenbusch.
▶ 1:39:05Sen. Warnock: The president's war in iran has increased fertilizer prices for farmers in the united states further. You are the ceo of the fertilizer institute. The trade association representing the companies that provide farmers with fertilizer. Has a white presented you with a viable plan for bringing down fertilizer prices this year?
▶ 1:39:27Mr. Rosenbusch: Thank you for that question. We have been very engaged with discussions on capitol hill and administration on all government approaches to solutions to help mitigate the impacts of the closure of the strait. What canwe can do to incentivize -- what we can do to set of eyes more domestic supply. These supply shocks will hurt the farmer -- will not hurt the farmer in the future.
▶ 1:39:56Mr. Rosenbusch: When we are so reliant on some of these foreign supply sources around the world.
▶ 1:40:00Sen. Warnock: Do you expect fertilizer prices to go down this year?
▶ 1:40:04Mr. Rosenbusch: That's a really interesting question. I don't know that I can comment or legally predict what will happen with the price of fertilizer. But I will tell you that we are very concerned about particularly phosphate. With a $1000 plus sulfur right now due to the restriction coming through the strait, we are at a point where sulfur costs alone are significantly higher than the cost of phosphate.
▶ 1:40:32Mr. Rosenbusch: You have seen around the world phosphate mines are curtailing production because of some of that price impact.
▶ 1:40:38Sen. Warnock: Same question for the rest of the panel, have you seen a viable plan from the white house that gives you confidence fertilizer prices will decrease in the near term? No takers? So fertilizer prices are increasing. Diesel costs have also increased by over two dollars a gallon. Compared to this time last year. And there's no end in sight. Mr. melton, you're the president of the kentucky farm bureau.
▶ 1:41:07Sen. Warnock: You know farmers in the south typically don't free purchase their fertilizer. And are more subject to price volatility. What are you hearing from your members? Are they able to afford fertilizer this planting season?
▶ 1:41:24Mr. Melton: In kentucky, we got an early start this year and most of the crop has already been planted this year, senator. But I can tell you that -- especially on our farm, we did more intensive soil testing and applying fertilizer where we had to without trying to reduce yields. I think that is across the south. A lot of people are doing those things.
▶ 1:41:51Mr. Melton: Trying to get more creative to where we can try to pencil out a profit with where current prices are for commodities.
▶ 1:41:59Sen. Warnock: So people are feeling therefore -- the affordability pinch.
▶ 1:42:08Mr. Westling: People are cutting back user on fertilizer -- use of fertilizer on farms, yes, sir.
▶ 1:42:14Sen. Warnock: This hits farmers at the worst possible time. Planting season. I am not hearing from anyone here that the white house has a plan that will solve this crisis for farmers. Dialogue is one thing. A plan is another. At this point the best case scenario for farmers is the reopening of the strait of hormuz. Which was open before the war started.
▶ 1:42:39Sen. Warnock: But even then, the fertilizer market will not bounce back overnight if it were to open tomorrow, it would still -- we would still be dealing with these prices. Between the war in iran spiking fuel and fertilizer prices and the illegal trade wars increasing the cost of equipment and limiting market access, it is no wonder the department in georgia says we cannot take much more and we are dealing with this farm foreclosure crisis.
▶ 1:43:09Sen. Warnock: As a member of this committee, will continue to fight for farmers and doing everything I can to end this illegal war in iran and unfreeze fertilizer and fuel markets. Thank you. >> recently had an opportunity to get together with secretary rollins as well as our chairman, senator boozman. To talk about short-term and long-term efforts to reduce fertilizer prices.
▶ 1:43:38Sen. Warnock: One of the ways we are doing that is with precision agriculture. Brian is here with us today in the audience along with great -- greg t. The farm was named as the actual first proving ground or test site for ag technology to develop position --
▶ 1:44:09Sen. Warnock: Precision ag so we can use less chemical and fertilizer for our crops. That is exactly the kind of work we are doing in conjunction with ars and funding. That has an impact on the short term and the long-term because basically you get the same result with less fertilizer.
▶ 1:44:31Sen. Warnock: I would like to hear from kubiak and melton on what kind of things need to happen so that farmers can utilize the technology both know and in the future.
▶ 1:44:44Mr. Kubik: Thank you for that question. All farmers are already using it. There's retailers using state-of-the-art machines and variable-rate technology. And it is a goal to use less fertilizer or maximize the efficiency of our fertilizer use.
▶ 1:45:09Mr. Kubik: Something my farm did last year, with a little bit of rain, we can lower the amount of nitrogen we need to grow a bushel of corn and that is key. I don't know if we are using less nitrogen, we are more so placing it where it needs to be. But ultimately that is the goal. A lot of precision equipment technologies on the field today.
▶ 1:45:32Sen. Holven: Thank you. Research and development is probably one thing and you brought up your university -- our university does an outstanding job of doing research on projectslike they are talking about in your state. Would have to continue to do research and development into these technologies.
▶ 1:45:53Sen. Holven: Alliance and for the have younger folks on my farm that can help apply these technologies -- because some days I have trouble starting the tractor now -- but I am thankful that we do have the research and development from the universities and land grants that can do these projects and work on technologies that can be brought to us to get more efficient into the future.
▶ 1:46:13Sen. Holven: We may have a little trouble with some new technology but they like the fact that your labor -- they don't have to pay too much. Guessing a volunteer.
▶ 1:46:27Mr. Melton: I don't volunteer but they did tell me sometimes when I am there, some of the jobs are not the most prestigious jobs anymore.
▶ 1:46:33Sen. Holven: In north dakota, we also take coal and converted to natural gas and converts it to fertilizers like ammonia and urea. How we get lower prices rather than getting it from indonesia or russia where it is high-priced and a lot of transportation costs?
▶ 1:46:59Mr. Westling: The question was asked earlier about the plan from the usda or whatever agency wants to take it on. I think the plan is if the demand is going to be there, increasing supply. Because that should lower the costs. The demand is there.
▶ 1:47:18Mr. Westling: And so, I think some of the ideas I alluded to earlier with incentivizing projects on the front end of this process, helping bring capital, additional certainty certainly when the government liens in, everybody else liens in -- leans in, everybody else leans in. I would absolutely agree we need more of them.
▶ 1:47:47Sen. Holven: We appreciate your project in nebraska. Mr. rosenbusch. What do we do in the short term to get more competition and fertilizer prices down?
▶ 1:47:57Mr. Rosenbusch: It is an excellent question. It's really difficult right now when you have got countries all over the world driving up the price by subsidizing and paying high prices. I agree with Mr. westling.
▶ 1:48:16Mr. Rosenbusch: The administration has done things to incentivize bolstering domestic supply and we need that whether it is permitting reform -- some of the equipment required to build plants such as his and nebraska have to be imported so there's tariffs on some of those pieces of equipment, driving up the cost of construction. The little things like hours of service exemptions to make sure we can get fertilizer delivered. Prioritizing fertilizer for domestic supply.
▶ 1:48:42Mr. Rosenbusch: Which is also on the back of delaying some of the plant turnarounds to make sure we are optimizing supply coming out of the existing plants.
▶ 1:48:50Sen. Holven: Thank you.
▶ 1:48:52Chair Boozman: Senator welch.
▶ 1:48:55Sen. Welch: Thank you for this excellent hearing. I want to complement the witnesses. Very instructive. I appreciate the information you provided to us. We are in a crisis in american agriculture. There's an immense amount of wealth that is being created by the farmers, they are just not getting any. And let me just illustrate that point by -- with a report from our department.
▶ 1:49:26Sen. Welch: The average loss for rice is $220 an acre. Cotton, $202 an acre. Oats, $159 an acre. Peanuts, $131 an acre. Sorghum, $91 and eric are -- an acre. Corn, $87 an acre. This is not sustainable.
▶ 1:49:49Sen. Welch: Doing some of the things he was talking about, precision agriculture, things within the control of the farmer, they are doing that every day, figuring out ways to do it. But if we have this inability to do any control over what the input costs are and they march up, step-by-step as the price of corn goes up and the price of oats go up, the farmer is totally at the mercy of a market that is consolidated.
▶ 1:50:21Sen. Welch: He talked about consolidation, Mr. kubik. I was impressed how specific -- with how specific you wear. But that is an issue we have to deal with. You can deal with precision agriculture and figure out best practices and you've got your own incentives to to spend as little as possible but what about consolidation? Where it would take some federal action to deal with the impact of consolidation. See that as a real impact in pricing. Right?
▶ 1:50:51Mr. Kubik: 100%. That is one thing I wanted to emphasize. The federal government has the ability to go in and look at this. We do not as individual states.
▶ 1:51:03Sen. Welch: And you see that is beneficial to farmers. And it doesn't matter whether they are republican or democrat or independent farmers, they like to do the work they do. That is what they are about right?
▶ 1:51:15Mr. Kubik: Correct. We asked a purchase inputs in a competitive market.
▶ 1:51:20Sen. Welch: What about transparency? Why don't we pass the farm bill? Transparency seems to be something you all believe in including you Mr. rosenbusch. That transparency is good. Any problem with passing the thune-klobuchar bill? Good. I would like us to do it. And right away. We've got to help these guys. On small-scale farmers, it is really brutal as well.
▶ 1:51:51Sen. Welch: We are seeing consolidation as well but that is not to drive profit, it is because the smaller farmers cannot sustain themselves when they are losing this much per acre. Do you -- you just talked to me about that. I was on the nitty-gritty farm in charlotte, vermont. Eighth generation. Two kids. Hoping for the ninth generation. The farmers I know love the idea of passing the farm on to their kids. Tell me about that they should.
▶ 1:52:22Sen. Welch: -- that issue.
▶ 1:52:31Mr. Green: Whether it is farmers in your state or other places, no matter how big they are, they are still much smaller than the processors and the retailers that are downstream from that. So their ability to negotiate fair prices is very limited. Some of the processors themselves are price takers versus the retailers.
▶ 1:52:53Mr. Green: We have got a system where the consumer is paying more, the farmer is getting less, and the folks in the middle are getting the benefits of all the hard work being done. That is where the focus needs to be.
▶ 1:53:09Sen. Welch: I believe the iran war -- it is incontestable that it has raised prices. Diesel, fertilizer is way up. What I heard from you is that is intensified with a pre-existing problem with the consolidation and high prices and really tight margins farmers are facing. Correct?
▶ 1:53:37Mr. Green: Absolutely.
▶ 1:53:38Sen. Welch: I just want to thank you for your for assistance and advocacy on behalf of the people near and dear to you. Rural america is critical to the well-being of all of americans. And I think we have to act. This congress has to act. You run a bipartisan committee. Everything I heard effects farmers regardless of political affiliation.
▶ 1:54:05Sen. Welch: I hope we move that bill and do everything we can in consolidation and transparency.
▶ 1:54:13Chair Boozman: I hope we can act with this and several other things and get the farm bill passed.
▶ 1:54:18Sen. Welch: Thank you all.
▶ 1:54:19Chair Boozman: Senator moran.
▶ 1:54:23Sen. Moran: Please know that I join you in your efforts to combine a a few things and get a farm bill done. An opportunity to provide certainty to farmers at home. Thank you for your testimony. Is a hugely important issue. I have represented kansas farmers and producers for a while.
▶ 1:54:48Sen. Moran: I see this as the most challenging time that my farmers in kansas have faced since I have been a public official. It is in part due to five years of drought. It is not over yet. And so, we begin the financial circumstances of most farmers at home in very difficult circumstances without the financial capability to whether another storm.
▶ 1:55:12Sen. Moran: So I am very interested in trying to determine if there is a legislative fix to many forces that go on that are bigger than this one issue. Mr. rosenbusch. I read your testimony. I noted you talked about fertilizer and fertilizer components. There is a science which this year and has helped me better understand. It's not just one component.
▶ 1:55:41Sen. Moran: It's related to so many other items necessary. But the closure of the strait of hormuz was probably not a circumstance that my farmers predicted. And it has a significant result, as I understood, to the world's sulfur supply and 20% of the supplier liquefied natural gas.
▶ 1:56:08Sen. Moran: As sulfur is a key component of phosphate production, would it be fair to say that global phosphate access has been affected by the closure of the strait of hormuz? That is true?
▶ 1:56:21Mr. Rosenbusch: Thank you for that question. I appreciate your understanding of the complexity of the markets. One of the reasons that we support transparency. Because it is really difficult to track all these commodities in the market -- and the markets for them. Sulfur is a big issue right now. We have the spot market trading as much as $1300 of metric ton and a lot of that is getting bought by chinese for mining.
▶ 1:56:49Mr. Rosenbusch: When you look at copper, that might be $16,000 a metric tons of cell. That is where the free market is going to take a lot of that product as opposed to fertilizer production. This will continue to be a challenge going into the 2027 crop year. Is a double edge in that we need supply. We definitely support the idea of bringing more supply to the U.S. farmer.
▶ 1:57:17Mr. Rosenbusch: I was looking at the numbers we have 100 companies that supply nitrogen to the U.S. we have 38 companies that supply phosphorus to the united states. 16 that supply potash. The double-edged sword is we expose ourselves to -- we expose ourselves to do political events. Have different opportunities to continue to find reliable global sources.
▶ 1:57:42Sen. Welch: -- >> one of the things that would be useful is a tariff to encourage domestic production. The there -- the tariff tariff increases the parts of the input. Have we seen an increase in domestic production? >> I appreciate you raising the challenging topic.
▶ 1:58:11Sen. Welch: Long term when you put nonfree market measures in place from a policy perspective, we understand that is going to have a worse consequence on supply for the united states and wii saw that with venezuela recently where we have opened up that market but that product is going to go wherever the farmer will be the most which is brazil right now. If we artificially impact the U.S. market, we will not be able to track supply in the future. >> why are we being outcompeted?
▶ 1:58:42Sen. Welch: Why is somebody else more capable of paying the higher price? >> is a good question. One because you have foreign governments driving up the price of that their subsidies. I heard recently in ethiopia. It is bidding for a limited supply right now. India's lang $1000 of metric ton they subsidize the farmers so there's your floor price and that since the global market price right there. >> focused a moment on tariffs, but there is this distortion of markets.
▶ 1:59:17Sen. Welch: Subsidizing in a way that disadvantages U.S. farmers. >> and that will attract what we need as well. We need those vessels behind the strait to come. It will take a while for that market to work itself out.
▶ 1:59:41Sen. Welch: As I mentioned in my testimony, 40 plans have been curtailed because of no natural gas where they were hit by missiles or drones. >> I understand. Thank you all very much.
▶ 1:59:50Chair Boozman: Senator justice.
▶ 1:59:54Sen. Justice: You will waited a long time to hear from me. He will find me to be this guy, I will be the guy that with logic and reason -- and I appreciate our chairman like you can't imagine and all these great committee members right here. They do a great job. They really do. There's a real problem here.
▶ 2:00:23Sen. Justice: And I've heard lots of stuff from lots of people here just today. And they say things like, what do we do to get fertilizer prices down? Is the iranian war killing farmers? Plenty of dollars in ag. But farmers are not getting those dollars.
▶ 2:00:45Sen. Justice: Trent kukik says many things but one thing that beams from him is he loves what he is doing. He does not want to give it up. You know, I started our farming operation, well, 50 years ago. We grew it. At one point in time, we were the biggest race of the mississippi river.
▶ 2:01:15Sen. Justice: We were -- east of the mississippi river. We were seven or eight time national corn grower winners. I know a lot about this. I really do know a lot about. And I am a business guy. I have got an mba and I am a business guy. And I would tell you just this. You have a colossal problem.
▶ 2:01:48Sen. Justice: Because you've got a lot of people here that would really like to help. But I don't know that they will. At the end of the day, you have got frustration, and to be perfectly honest, it is probably going to get worse. We have to move. Mr. chairman, you know, and I know, too, that we have to move. We are losing folks every day.
▶ 2:02:15Sen. Justice: And the tragedy is beyond total belief. I think about any mountain there, I have known of him forever and a day and now I am getting the opportunity to meet him and everything, and I would say to you just this, did you ever know Dr. kenneth wells at the university of kentucky?
▶ 2:02:40Sen. Justice: He came to our operation when I was just a kid and really basically -- I owed just about everything I know about agriculture so kenneth wales. -- to kenneth wales. There is so much good in this room it is unfathomable. But when you think about questions of, does the fertilizer industry really want transparency? Are you kidding me? Really? Do we really believe that?
▶ 2:03:13Sen. Justice: Sure, it is easy for us to say. But do we really believe -- what we have here is a monopoly. We do. If we look back at ag prices, think just a second about this. 2022, not long ago, corn prices were seven dollars. Today at harvest time this past year, they have drifted significantly into the three dollar and something price.
▶ 2:03:41Sen. Justice: Do you realize that when harry was the president of this country, corn prices were $2.50? Go back and look. Think about it. How in the world can we possibly not act? We have got to move now.
▶ 2:04:04Sen. Justice: Or we are going to awaken to an agriculture industry that is so different than we could ever think, and it will be bad. It will be better for all of us. We have got to do something right this minute. I don't know exactly what all the answers are but there's all kinds of combinations of lots of things. And it can be done. It can really be done.
▶ 2:04:34Sen. Justice: But absolutely we have got to move and move today. From the standpoint of fertilizer prices, it is the most bewildering thing in the world. Just think about this -- I am from a state that abounds in coal as well. He let coal go from $100 one ton at the mindset to $200 a ton.
▶ 2:05:06Sen. Justice: Instantaneously, freight costs will go from $30 a ton to $53 a ton. If the price goes from there, to $300, the freight costs will go from $53 to $61 a ton. And nothing has changed. Nothing is changed. -- has changed.
▶ 2:05:30Sen. Justice: It is up to all of us in this committee and up to us as legislators to do something. Because these people are really hurting. And it is time right now. Mr. chairman, I know how much you love these people. And I plead with you, someway, somehow, we've got to solve the riddle. Because it is really important. God bless each and every one of you. Thank you.
▶ 2:05:58Chair Boozman: Thank you, senator justice, very well said. Senator schiff.
▶ 2:06:04Sen. Schiff: Thank you, Mr. chairman. Last week I was lucky enough to engage with some of the agricultural leaders across ventura county. These fresh produce growers shared a bit about their challenges being squeezed by retailers. Whether that is not being able to sell in a grocery store, because imported produce is cheaper, receiving the same cut even when the input prices change or essentially subsidizing remainder of products sold by retailers.
▶ 2:06:34Sen. Schiff: Can you elaborate on how specialty crop growers suffer w hen buyers abused a consolidated return market -- abuse their power especially in a consolidated retail market?
▶ 2:06:51Mr. Green: Here is a big challenge which is there are dominant power buyers in the retail space that can exercise their power, up stream to the farmer, no matter how fabulous the product they are raising, they do not have the opportunity to meaningfully negotiate when there's so few choices to where to bring the product.
▶ 2:07:17Mr. Green: When largest power buyers have the footprint in the market, so if they go someplace else or usda and say can you please inspect, instead of giving me dinging -- dinging me for no documentation, for not delivering certain amounts or things, or when they change contract terms, longer-term contracts, if the price goes up, the hour-by-hour keeps the same low price.
▶ 2:07:48Mr. Green: If the price goes down, the farmer has to eat that price drop. . Same thing around financing terms getting longer and longer. The farmer is floating the retail power buyers a no interest rate loan.
▶ 2:08:02Mr. Green: It is real evidence that there are market power problems in the market you referred to and probably violations of the perishable agricultural commodities act as well and it is what we see in other sectors as well of this imbalance of market power that requires usda, doj, ftc and government to help balance those situations.
▶ 2:08:29Sen. Schiff: Is in the produce section of the store?
▶ 2:08:34Mr. Green: I don't know that per se. But I think when it is the most attractive part of the store, that is really important.
▶ 2:08:51Mr. Green: Making sure the farmer is sharing in the benefits is precisely why there are rules around making sure that volume discounts are available to every retailer, making sure that the price, you know, when a product comes, a usda inspector can be protected.
▶ 2:09:16Sen. Schiff: You mentioned these practices might violate a certain statute. Can you explain that?
▶ 2:09:18Mr. Green: The perishable agricultural commodities act goes back to 1935i think and prohibits unfair and deceptive practices and it is similar to the packers and stockers act and the trade commission act and basically says if you are doing business you have to do business in a fairway and transparent way, these are well-established possibles and usda has enforced it for a very long time. I worry about staffing at the agriculture marketing service and other places.
▶ 2:09:48Mr. Green: But it's a very important statute for the efficiency and competitiveness of the specialty crop industry.
▶ 2:09:55Sen. Schiff: Any ideas you can share about how to equalize even a little the incredible disparity between the market power of mass retailers and farmers?
▶ 2:10:08Mr. Green: You've got to rein in the retailer. One of the reasons why the act sets prohibition against discriminatory predatory and other types of pricing differences. So you can have a competitive retail sector. So the dominant power byer is -- buyer is not able to be so dominant that they don't have a choice.
▶ 2:10:34Mr. Green: If a retailer is not playing fairly, they can go somewhere else to take the product. It's got to flow up to the farm.
▶ 2:10:44Sen. Schiff: Thank you very much. Thank you, Mr. chairman.
▶ 2:10:48Chair Boozman: Senator slotkin.
▶ 2:10:50Sen. Slotkin: I know you've gone through a lot of this. If you are getting me, you are at the very end, so you can rest easy. I have a question. I come from michigan. Specialty crops state. We do have other crops but specialty crops is what we specialize in. That tends to be small and medium signs farms. Not to make a farms of some other states.
▶ 2:11:19Sen. Slotkin: I was hoping to ask a question of Mr. melton. Can you talk about with the pinch of fertilizer is doing in your state to some of the specialty croppers? Because of the uncertainty going on in ag, can you talk to me about what they are seeing in kentucky?
▶ 2:11:51Mr. Melton: Thank you. We know that fertilizer is plant food. I don't care if you are growing specialty crops or forage for your livestock animals, fertilizer is an important key to that. And when you bring it down to that level, that is what we are all dealing with right now. The cost of those fertilizers. In our specialty crop markets, it is very much affecting them on their farms just like it is all the other aspects of purchasing fertilizer.
▶ 2:12:20Sen. Schiff: -- senator slotkin. It feels like there are so many variables right now. The weather you cannot control but there are these other factors making it really hard in my state to keep farming. There's a real existential question going on for folks. I live on my family farm. I leased the land out to a soybean farmer. I see those things clearly.
▶ 2:12:52Sen. Schiff: Does anyone on the panel have a sense? We have this chokepoint now in the persian gulf. Traffic is not getting back and forth. Let's say the persian gulf opened up tomorrow. How long do we understand it to be until the fertilizer goes through and comes back to the united states and we can see this market regulating? Oem and gas people -- oil and gas people say it will be a year even if the strait of hormuz opens up today.
▶ 2:13:23Sen. Schiff: Any sense on fertilizer? >> I guess that is my question. Thank you for your question and your knowledge of potash. We appreciate all you do there. Once it is open, it would take a good month for those vessels to clear and get to their market destinations.
▶ 2:13:46Sen. Schiff: What is still unclear is what the damage has been to those manufacturing sites in that region, we estimate there's about 40 plants that have been shuttered or closed down because either they no longer can produce or they were actually damaged because of the conflict. It could be months or years for those to come back online.
▶ 2:14:08Sen. Slotkin: Can we stay on potash for a second? We have discovered it in michigan, we are very excited about it. I am supported about mining that potash. -- supportive about mining that potash. What do you see as the challenge of getting that off the ground?
▶ 2:14:41Sen. Slotkin: I think having access to critical minerals is part of that. Tell me with the constraints and situation is. >> we need farmers to have as much supply as possible so they can be successful. Permitting is a huge issue. Decades to get them up and running. Capital is a huge challenge when talking about billions of dollars that it takes to run and the return that is required. That is another issue.
▶ 2:15:12Sen. Slotkin: I'm sure Mr. westling can comments from a nitrogen perspective. Those are probably the two biggest challenges, m permitting -- and m permitting. >> and not take 15 years to get a yes or no. >> if people are putting the investment into these facilities in five years, what's the market going to look like? And can you still justify it?
▶ 2:15:36Sen. Slotkin: That is fair. I don't want to abuse my time. I see there's other folks on the panel. If it's ok to finish up. >> you also need a competitive market if you want to talk about getting new fertilizer. If the market is constrained and dominant powers ice anybody that enters it out by squeezing them, there's no incentive to invest.
▶ 2:16:02Sen. Slotkin: There's been a series of mergers that go back to 2010, 2015, 2018. All those mergers can be reviewed by the ftc and department of justice. They can all undone. The price of fertilizer even if the strait of hormuz opens back up, we saw the price of fertilizer in 2022 drop back but not to where it was prior to the ukraine war. It stayed high.
▶ 2:16:31Sen. Slotkin: The issue of the concentration shows the underlying competitive intimacy of the market needs to be addressed.
▶ 2:16:42Sen. Slotkin: Thank you. I yelled back. -- yield back.
▶ 2:16:45Chair Boozman: I've just got a couple of things to say since I gave my time away to senator thune. We talked a lot about transparency today and access to more information.
▶ 2:17:03Chair Boozman: I guess the question I have, as producers, what information do you have access to that help to better understand the input markets? And what additional information would be helpful? Anything specific we can actually sink her teeth into? -- our teeth and took?
▶ 2:17:37Chair Boozman: -- into?
▶ 2:17:41Mr. Kubik: A lot of information comes from the retailers.
▶ 2:17:42Chair Boozman: Can you understand it?
▶ 2:17:44Mr. Kubik: It is hard to fathom how corn price can be here and fertilizer to be here.
▶ 2:17:53Chair Boozman: Sometimes it is so complex with so much information.
▶ 2:17:55Mr. Kubik: If we can see ports of where fertilizer is coming from, like minneapolis, sioux city, just to get our heads wrapped around that, and to see the margin built in and see what the supply chain is like from processor to retail to help us risk and mitigate a little more.
▶ 2:18:19Chair Boozman: I think we know the demands there. We talked about it several times today. I think knowing what the supply as we are dealing with ahead of time. What's the supply going to be moving forward?
▶ 2:18:47Chair Boozman: We have some way to know and predict what the supply is moving forward. And we have access to that information. It might help me as a producer and it would help trend knowing where the supply is and if we are going to be able to get it, when we needed. -- when we need it.
▶ 2:19:06Chair Boozman: You are in the process of building a new facility in nebraska, Mr. westling. Give us a thing you are experiencing -- a thing that congress or the admonition can do to spur domestic fertilizer production, what would have helped you?
▶ 2:19:28Mr. Westling: I think the program -- thank you for the question. I think the program had some, te the construct was good. What it wanted to do incentivizing these types of projects was a good thing and ultimately could be distributed in a way that could have a big impact on bringing more of these to the market place. I don't think there are 20 or 30 projects that need to be built.
▶ 2:19:58Mr. Westling: It is a handful in of places to augment larger production but bringing dollars of those projects would absolutely be impactful.
▶ 2:20:05Chair Boozman: Very good. And finally and then we are going to give you a little break -- we have seen what military conflict and disputes, all that is going on in the world right now, we live in a dangerous world. This is for anybody that wants to jump in. What else should we be doing to reduce our exposure to foreign disruptions? You have seen what blocking the strait has done.
▶ 2:20:39Chair Boozman: This is national security. Do we need an oil reserve? Some sort of reserve of fertilizer? Does anybody have any ideas? Go ahead.
▶ 2:20:55Mr. Green: I want to underscore the importance of seeds here. Seed resiliency and the seed bank is a national security resources so we have the genetics to be able to adapt to regional varieties and the research and the access the department of justice filed just yesterday, a very important statement around the ability to read the genetics pyramid I think fertilizer has to be thought of in context of these other tools that can keep us nimble, flexible, resilient and
▶ 2:21:26Mr. Green: Self-reliant across markets. >> thank you for that question. We talked a lot about strategic reserves recently. Fertilizer's very different than oil and gas. It would be an honor to take you to some of these massive facilities and warehouses where these products are stored and you will see the m complexity of how large these facilities are.
▶ 2:21:49Mr. Green: Fertilizer as well if kept for a long time, quality can deteriorate fast and you get clumping and you start to see it form big blocks of concrete. It's not something that can be stored for long periods of time. The answer is let's bolster our domestic supply with projects like Mr. westling. >> I would add, make the stuff for you use the stuff.
▶ 2:22:14Chair Boozman: Ok. Thank you all very much. This has really been a good discussion. I think everybody on the panel has learned a great deal as a result. You can see this committee is very serious and really does just a good job, we've got a great group of members on both sides that work hard.
▶ 2:22:35Chair Boozman: As was mentioned, agriculture farmers -- it is not about republican farmers or democrat farmers or republican or democrat small towns -- this is about trying to help out and trying to stabilize just a tremendous asset of this country. With that, again, thank you for being here.
▶ 2:23:01Chair Boozman: The record will remain open for five business days, and we are adjourned. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap.org]