At the recent USDA press conference on fertilizer actions, we asked about the Department’s efforts in fertilizer price discovery. USDA Deputy Secretary Stephen Vaden provided an update on the administration’s efforts.
Deputy Secretary Vaden said, “The way price discovery generally works is you have multiple competitors in the marketplace and it’s through their competition we find what the appropriate market price is and consumers. As you know, when it comes to several of these fertilizer markets, we have at times two companies that control 90% of the market. And so you have a question as to when there are only two companies competing, do we really know what the market price is because do they have the incentive to go against one another as if we had five players, six players, more players. So I think an important piece of that is what the Department of Justice joined with the Federal Trade Commission are currently doing.”
“It’s public knowledge that they are investigating the fertilizer market, they are issuing questions to these companies, they’re examining their business practices, and we need farmers to share with us the information that they have about what they are hearing from their own fertilizer dealers. Because I know, for example, when I go back home to Northwest Tennessee, they’ll tell me about phone calls they got that predate the conflict in the Middle East. And those phone calls all say the same thing. If you buy your fertilizer now, it’s X. If you go down the road 30, 45, 60 days, it’ll be Y. Y is always greater than X, and on. And that’s very interesting for a commodity that’s supposed to be publicly traded and if we’re talking about other commodities like, for example, oil or other widely known commodities, you wouldn’t be able to say that with such assurance. And yet our farmers have been dealing with that for years. So that is where the president’s executive order, asking the Department of Justice, asking the Federal Trade Commission to look into these markets take place. But it’s also where the initiatives that each of these cabinet members have announced have come into play, because by getting more people in the market and more supply, we will have more competition, which will give us more faith that the price that farmers are paying is indeed the correct market price,” said Vaden.
Audio Reporting by Dale Sandlin for Southeast AgNet.