Mosaic Reduces Production Despite Calls to Boost Fertilizer Supply

Mosaic’s July reporting shows the company is producing significantly less fertilizers, despite calls from US farmers to boost the country’s fertilizer supply.

Rabat - US fertilizer giant Mosaic is selling less fertilizer, at significant profit, despite US farmers’ pleas to expand the domestic fertilizer supply to ease local hardships. In a report detailing its July revenue and sales volume, Mosaic highlighted selling significantly less fertilizers while raking in profits from current high fertilizer prices.

In July 2022, Mosaic sold 921,000 tonnes of fertilizer, down from nearly 1.2 million tonnes in July of 2021. Despite this nearly 25% cut in sales, the company touted revenue increasing from $585 million in July 2021 to $848 million in the same month this year.

The effects of Mosaic’s artificial monopoly on the US fertilizer market are felt at the local level. For months farmers have been begging the US government to step in to bring down astronomically high - and still rising - fertilizer costs. A 2022 Texas A&M study estimated that US farmers face $128,000 in extra costs per farm due to the rise in fertilizer prices.

Mosaic’s falling sales volumes are likely to worry farmers, who are currently in the process of procuring fertilizers for the coming planting season.

Mosaic’s grip on the US fertilizer market has only tightened in recent months, as the few competitors it had left, in Europe and Canada, have been forced to cut production due to high costs of natural gas, which is used to produce ammonia, a key ingredient in fertilizers.

Many farmers, and the organizations representing them, have called on the US government to bring relief by lifting its tariffs on fertilizers from Morocco. The phosphate-rich North African country has significantly boosted production amid fears of a looming global food crisis, yet American farmers have been unable to benefit from this trend due to the US’ tariffs.

These tariffs are the result of a 2021 decision by the US International Trade Commision (USITC) which, after an intense lobbying campaign from Mosaic, granted the US fertilizer giant an effective monopoly, controlling an estimated 90% of the domestic fertilizer market.

The USITC argued that Moroccan fertilizer production benefits from “indirect state subsidies,” despite Morocco’s fertilizer company OCP Group in 2021 paying over $834 million to the state over $5.9 billion in revenue. Mosaic meanwhile paid $209 million, from $12 billion in revenue.

Over the past months, American Politicians have made several attempts to call for a waiver on Moroccan

fertilizers. But these efforts have been met by resounding silence from the US administration.

While admitting that it will “take a while… and a lot of money” to increase local fertilizer production, the US Agriculture Secretary Tom Vilsack stated during a recent tour of Iowa that the administration is focusing on “building local domestic production.”

Meanwhile, Mosaic’s July results show the domestic fertilizer producer has little incentive to boost supply. During Vilsack’s tour, US Senator Joni Ernst pointed to the USITC tariffs as one of the sources of farmers’ hardships, describing the tariff as “nothing more than a tax on our farmers.”