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Sens. Moran, Marshall & Reps. Mann, Costa Lead Colleagues in Calling on Biden Administration to Reduce Duties on Phosphate Fertilizers

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By the Office of US Senator for Kansas Jerry Moran

 

WASHINGTON – U.S. Senators Jerry Moran (R-Kan.) and Roger Marshall, M.D. (R-Kan.) and U.S. Representatives Tracey Mann (R-Kan.) and Jim Costa (D-Calif.) lead 35 of their colleagues in calling on U.S. Department of Commerce (DOC) Secretary Gina Raimondo to revise how DOC calculates countervailing duties (CVD) on phosphate fertilizers from Morocco.

The U.S. Court of International Trade (CIT) recently remanded to the Department of Commerce a calculation of its subsidies, which impacts duties imposed on phosphate fertilizers. The bicameral group addressed the financial burden these duties are placing on farmers.

“We ask that Commerce carefully consider and follow the CIT’s decision in Commerce’s recalculation of the subsidy amount, both in its final determination in the investigation and its administrative review,” the members wrote. “Reducing the subsidy rate would provide welcomed relief for U.S. farm suppliers and their customers, American family farms.”

The letter was signed by Sens. John Boozman (R-Ark.), Ted Budd (R-N.C.), John Cornyn (R-Texas), Joni Ernst (R-Iowa), Deb Fischer (R-Neb.), Chuck Grassley (R-Iowa), Bill Hagerty (R-Tenn.), Cindy Hyde-Smith (R-Miss.), Pete Ricketts (R-Neb.), Thom Tillis (R-N.C.), Tommy Tuberville (R-Ala.), Roger Wicker (R-Miss.), and Todd Young (R-Ind.) and Reps. Mark Alford (R-Mo.), Jim Baird (R-Ind.), Mike Bost (R-Ill.), Sharice Davids (D-Kan.), Mike Flood (R-Neb.), Sam Graves (R-Mo.), Michael Guest (R-Miss.), Dusty Johnson (R-N.D.), Trent Kelly (R-Miss.), David Kustoff (R-Tenn.), Jake LaTurner (R-Kan.), Julia Letlow (R-La.), Mariannette Miller-Meeks (R-Iowa), Barry Moore (R-Ala.), Zach Nunn (R-Iowa), Jimmy Panetta (D-Calif.), Greg Pence (R-Ind.), John Rose (R-Tenn.), David Rouzer (R-N.C.), Adrian Smith (R-Neb.), Mike Ezell (R-Miss.) and Ann Wagner (R-Mo.).

The full letter can be found here and below.

Dear Secretary Raimondo,

We write concerning the countervailing duty (CVD) proceeding on Phosphate Fertilizers from Morocco and the recent remand of the Department of Commerce’s (Commerce) subsidy calculations in this proceeding (Mosaic Co. v. United States, Consol. Court No. 21-00116, Ct. Int’l Trade Sep. 14, 2023). As Commerce considers its response to the U.S. Court of International Trade (CIT), it is also finishing its first administrative review of the Order. We are encouraged by Commerce’s preliminary findings in its administrative review, reducing the subsidy rate from 19.97% to 14.49%. We ask that Commerce carefully consider and follow the CIT’s decision in Commerce’s recalculation of the subsidy amount, both in its final determination in the investigation and its administrative review. Reducing the subsidy rate would provide welcomed relief for U.S. farm suppliers and their customers, American family farms. 

Commerce’s subsidy rate calculation has a significant effect on U.S. farmers. In 2023, the U.S. demand for phosphate fertilizer is estimated to be 7.4 million metric tons. As the petitioner in the underlying proceeding continues to export production, imports are required to supply 2.7 million metric tons of this amount. Since the imposition of CVD on Moroccan phosphate fertilizers in 2020, the supply options to meet U.S. farmers’ phosphate needs have significantly decreased.  Saudi Arabia (where the petitioner has invested in production and which is not subject to any Order) has become the only major exporter of phosphate fertilizer to the U.S., accounting for 66% of diammonium phosphate (DAP) imports and 25% of monoammonium phosphate (MAP) imports.

This situation has contributed to the high volatility of fertilizer prices overall, increased costs of a critical nutrient, and exposed farmers to the risk of inadequate supply into the future, given the lack of sufficient domestic supply to meet U.S. farmers’ needs.   

While many factors impact the regional and global prices for phosphate-based fertilizers, the impact of the CVD proceeding on Moroccan exports to the U.S. was felt immediately and continues to provide upward pricing pressure.  Since the imposition of the duty, average prices in New Orleans, the central pricing hub for the U.S., have been the highest in the world.  This year, U.S. DAP prices were 11% higher than Brazil’s and 8% higher than India’s.  American farmers purchase this key input at elevated prices but sell their crops at global market prices where they compete with major producers such as Brazil.  The current CVD Order on Moroccan exports and magnitude places U.S. farmers at a competitive disadvantage.  We now understand from the CIT that significant errors in Commerce’s initial calculation exacerbated this disadvantage.   Accordingly, we urge the Department of Commerce to carefully address the matters determined by the CIT to be in error in the remand determination and in the upcoming final results of the final administrative review.

American family farmers need a reliable, diverse supply of many agricultural inputs, including fertilizers.  The administrative review and the response to the CIT remand present opportunities to address this situation and to properly consider the facts as to the amount of subsidies in this proceeding since its inception.

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