Dive Brief:

• The U.S. will lower tariffs on phosphate fertilizers from Morocco after pushback from farmers who argued the countervailing duties contributed to sky-high prices and short supply following the start of the pandemic.
• The U.S. Department of Commerce said last week it would decrease tariffs for Morocco-based producer OCP from 19.97% to 2.12%. OCP, Morocco's largest phosphate exporter, had halted shipments after duties were announced in 2021.
• Mosaic, the biggest phosphate producer in the U.S., had petitioned for the tariffs arguing that products from Morocco were heavily subsidized and distorted world prices. The manufacturer said "we are considering our next steps" following the decision.

Dive Insight:

Tariffs disrupted a key source of fertilizer at a time when supply chain shortages were already pushing prices higher. Farmers say removing tariffs is key to remaining resilient in the face of mounting global uncertainty.

"American agriculture must have market access to compete globally, and a major impediment like a fertilizer duty only undermines the ability to establish and expand markets," a coalition of 62 agricultural groups wrote to Commerce Secretary Gina Raimondo last month.

The new tariff rates come as the Department of Commerce responds to an order from the U.S. Court of International Trade to reconsider the duty rate calculation because of flaws found in the department's initial analysis. A decision on that matter is expected on Dec. 13, which could again change rates.

OCP said in a statement that while it welcomed the reduced rate, the company "continues to believe that there is no justification for any tariffs on our U.S. fertilizer imports."

Farmers launched an aggressive campaign to overturn the tariffs when they were first announced, accusing Mosaic and other fertilizer companies of petitioning for trade action in order to strengthen their own control of the market.

“Farmers pay the price when input companies monopolize a market,” Chris Edgington, Iowa farmer and then-president of the National Corn Growers Association, said in 2021. "To get our job done and keep prices reasonable, we need quick access to fertilizers from multiple companies, including those outside the U.S.”

Mosaic CEO James "Joc" O'Rourke said countervailing duties have "helped create a fair and competitive market here, and prices in the U.S. returned to parity with global benchmarks."

The company expects the decision to impact global trade flows, but said it should have little bearing on fundamental supply and demand dynamics. Mosaic on Tuesday reported a net loss totaling $4.2 million in the third quarter, compared with net earnings of $842 million a year ago.