By Jessica Domel
Multimedia Reporter

As planters start to roll across parts of the state, the Texas Corn Producers Association (TCPA) is asking for a formal update on the Department of Justice’s Investigation into high fertilizer prices and consolidation in that industry that is impacting farmers’ bottom lines.

“In recent weeks, leadership at the U.S. Department of Agriculture (USDA) publicly flagged the ‘unacceptable’ concentration in the fertilizer market, specifically identifying a ‘duopoly’ that has constrained supply and exerted excessive pricing power over American farmers,” TCPA wrote in a letter to U.S. Attorney General Pam Bondi.

USDA comments noted in the letter were reportedly made by Deputy Secretary of Agriculture Stephen Vaden in a webinar hosted by the National Agricultural Law Center Jan. 21.

According to DTN/Progressive Farmer, Vaden alleged in the webinar that some companies were colluding to restrict phosphate and potash supplies to increase costs.

“When the USDA—the very agency tasked with overseeing our industry—openly questions the actions of this highly concentrated market, it is a clear signal that the status quo is failing America’s farm families,” TCPA wrote to Bondi.

The association told the AG the current state of the farm economy is dire, and farmers need transparency as they tackle high input costs and lower crop prices.

“We’re hopeful that the Department of Justice and USDA have been actively working on the antitrust issues and market concentration issues that exist, and we just want to know where they are in the process,” Dee Vaughan, TCPA board member, told the Texas Farm Bureau Radio Network.

In September, USDA and the Department of Justice (DOJ) signed a Memorandum of Understanding, saying they would coordinate to protect competition in agricultural inputs like feed, fertilizer, fuel, seed and equipment.

“They’ve had several months now to work on it, but we’ve not heard a single word on where they are in the process,” Vaughan said. “We’d just like to have an update, and if they have not started, we certainly want them to start investigations.”

In December, President Donald Trump signed an executive order outlining DOJ, USDA and the Federal Trade Commission (FTC) to actively look into concentration in the food chain, including in the fertilizer sector.

“They have a clear direction to move forward,” Vaughan said.

Vaughan, who has been farming for 45 years, said concentration in the sector has been a problem that has proven costly for farmers.

“Years ago, we had many companies that were providing fertilizer. We had a lot of different choices in dealers at the retail level, and you had a lot of different manufacturers,” Vaughan said. “Over the years, we’ve seen all these companies concentrate down to the point where we basically have one large company that dominates the nitrogen industry and one that pretty much dominates the potash fertilizer.”

Vaughan said they’ve heard from economists that kind of concentration gives companies the opportunity to exercise market power.

“These are critical nutrients. We don’t have any other option to grow corn or any other commodity,” Vaughan said. “Basically, you have to have those nutrients added to your soil every year or you can’t produce your crops. So, it’s a vital interest not only to farmers, but to the consumer, because if we can’t produce the yields that we need for a growing population, we won’t be able to feed the world.”

Farmers are in a price squeeze right now because they’re paying more to grow the crop but getting less due to low commodity prices.

“You can’t switch between commodities because they’re all cheap. It doesn’t make any difference if you’re growing corn or cotton or soybeans or wheat. They’re all cheap, and they’re all producing less than the cost of production,” Vaughan said.

Farmers are operating on razor-thin margins, the letter to Bondi said, and in many cases at a loss as the costs of the essential nutrients needed to grow crops remain artificially inflated.

“This economic ‘squeeze’ is not merely a market fluctuation; it is a threat to the viability of the family farm. A threat to our national food security,” the letter said.

If the DOJ, USDA and FTC find that anticompetitive practices have occurred and are inflating prices, they may take action.

“It’s imperative that USDA and DOJ and the Federal Trade Commission work closely and investigate, if they determine that they are using market power to the detriment of producers, that something is done about it to create competition,” Vaughan said.

The letter to Bondi said farmers need more than a memorandum. They need transparency and solutions.

“TCPA urges you to provide a report on the progress being made to break up anticompetitive ‘games’ and restore a fair, open marketplace for agricultural inputs,” the group wrote.

The letter to Bondi was signed by TCPA President Hagen Hunt. Copies of the letter were also sent to Texas Attorney General Ken Paxton and Texas Commissioner of Agriculture Sid Miller.