Blitz lobbying pushed fertilizer prices higher

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A die America’s largest fertilizer producers have pressured the Trump administration to restrict foreign competition by imposing tariffs that are now contributing to inflation and the global food crisis, previously unreported emails and meeting notes show .

Just months into Donald Trump’s presidency in 2017, Mosaic Co. restrained Ballard Partners, whose founder was a top Trump campaign fundraiser, to impose tariffs on fertilizer imports. With Ballard’s help, Mosaic executives arranged high-level meetings with White House trade officials to discuss what they said were unfair subsidies for foreign importers, according to emails obtained through a request. of the Freedom of Information Act by American Oversight, a nonprofit watchdog.

The years-long lobbying campaign led the Trump administration to recommend 2020 tariffs that went into effect last year on phosphate fertilizers from Russia and Morocco, the world’s largest and fourth-largest fertilizer exporters, respectively. . As foreign imports fell, Mosaic gained control 90% of the US phosphate fertilizer market.

The disclosures show that Mosaic paid Ballard $1.49 million in lobbying fees. The company remains on the company’s payroll.

Over the past year, the costs of major fertilizers have reached record highs, fueling a food crisis around the world, including soaring meat and vegetable prices in the United States. While the war in Ukraine and supply chain issues have been major factors in the ongoing crisis, tariffs as well as war-related sanctions against Belarus and Russia have destabilized agricultural markets and the opposition to prices has increased.

Mosaic did not respond to a request for comment.

An employee watches the bucket of a dredge dig up phosphate at the Mosaic Co. South Fort Meade phosphate mine in Fort Meade, Florida in 2015.

Photo: Ty Wright/Bloomberg via Getty Images

Mosaic’s pressure on the fertilizer supply began with a series of meetings with top Trump officials.

Shortly after signing with Ballard Partners, Mosaic executives traveled to Washington, DC, to argue that phosphate fertilizers produced in Morocco, which controls nearly 75% of the world’s phosphate reserves, posed a competitive threat to their business. At the time, fertilizer prices were low and US suppliers feared that foreign state-owned companies were being unfairly subsidized.

On June 5, 2017, Syl Lukis, a lobbyist for Ballard, wrote that he was representing Mosaic in a E-mail to an adviser to the United States Trade Representative. Lukis sought to meet with the Trump administration’s top trade negotiator, Robert Lighthizer.

Lukis noted in an email that Mosaic’s CEO and senior vice president of phosphate production had already scheduled a meeting with Peter Navarro, the director of the National Council of Commerce.

“There are international trade issues they would like to discuss regarding Moroccan phosphate production,” Lukis wrote.

Later that month, Mosaic executives were scheduled to meet with Commerce Secretary Wilbur Ross. The emails show the meeting was scheduled by Lorine Card, an inside Mosaic lobbyist, and Linda Dempsey, vice president of international economic affairs policy at the National Association of Manufacturers, a trade group for which James O’ Rourke, the CEO of Mosaic, is a member of the board of directors. Correspondence shows that the lobbyists coordinated the meeting with a group of Commerce Department officials, including Eric Branstad, the son of then-ambassador to China Terry Branstad.

Meeting recordings show an event scheduled for O’Rourke, acting Undersecretary of Commerce for International Trade Israel Hernandez, and Mark Kaplan, an executive in Mosaic’s phosphates division. Planning recordings show that the meeting took place on the same day that Ross had planned to meet with Mosaic executives, although it is unclear whether the meetings should be combined or separate.

Discussions revolved around “key trade issues, including trade with the EU as well as competition here in the US from China, Russia and Morocco.” wrote Dempsey.

In July 2020, after years of lobbying Trump officials, Mosaic formally filed a petition with the U.S. International Trade Commission for a countervailing duty investigation to determine whether Moroccan and Russian exporters received subsidies. unfair.

In November 2020, the Commerce Department announced that it supported Mosaic’s claims and would formally advance the company’s tariff request. The following March, the ITC imposed duties of 20% on the Moroccan fertilizer giant OCP Group, 9% on the Russian company PhosAgro and 47% on the Russian company EuroChem.

View of the new industrial unit for the production of phosphoric acid and phosphate fertilizers in Jorf Lasfar, near El Jadida, Morocco, Thursday, December 22, 2011. By far the region with the largest reserve of phosphate is Morocco and Western Sahara in Africa, which has about 21 billion tons, while total US reserves are a more modest 4.6 billion tons.  (AP Photo/ Abdeljalil Bounhar)

View of the industrial phosphoric acid and phosphate fertilizer production unit at Jorf Lasfar, near El Jadida, Morocco, in 2011.

Photo: Abdeljalil Bounhar/AP

Critics immediately questioned pricing logic. A group of national farm groups filed a trade complaint, arguing that the tariffs gave Mosaic a “quasi-monopolyon phosphate fertilizers. The brief claimed that the US government erred in attributing a supply imbalance in the phosphate fertilizer market in 2019 to Moroccan and Russian subsidies. Farm groups claimed that Mosaic and another US-based company, Nutrien, had closed their factories while increasing their exports.

The Open Markets Institute, a think tank that studies competition policy, bolstered the lawsuit’s allegations in a letter last month, saying Mosaic in 2014 acquired rival CF Industries’ phosphate fertilizer business for $1.2 billion. Mosaic then decided to cancel plans for a $1.1 billion plant in Louisiana that would “increase the production of ammonia needed to make finished phosphate fertilizers,” as well as a $1 billion plant. dollars in Florida for the treatment of phosphate fertilizers. Mosaic, according to the group, used its savings to buy back shares. Following the imposition of tariffs on foreign competition, Mosaic’s shares roughly doubled over the next year, from $31.15 to $61.92. The stock is now hovering around $50 per share.

US farmers are facing fertilizer prices four to five times higher than last year.

In other words, Mosaic would have consolidated its market share, reduced the supply of fertilizers, then used its profits to lavish investors while lobbying to restrict competition.

In the United States, farmers face fertilizer prices four to five times higher than last year, according to a study by Texas A&M University, driving up the costs of a wide range of crops. Phosphate fertilizer at the start of the planting season this year was double the price of the previous year. Higher costs from raw material growth have also fueled higher meat prices, particularly beef.

Soaring agricultural prices have sparked growing opposition to tariffs. In March, a bipartisan group of congressional lawmakers wrote to ITC Chairman Jason Kearns asking the trade body to reconsider the duties imposed on phosphate fertilizer products imported from Morocco.

Sen. Roger Marshall, R-Kan., and Rep. Tracey Mann, R-Kan., also introduced a bill in Congress to authorize emergency waivers on fertilizer tariffs.

The Moroccan government has also launched a counter-lobbying campaign. Influential law firm Covington & Burling has received at least $15 million in fees from state-owned OCP for its work tackling tariffs and other key issues for Morocco .

Mosaic asked the US government to oppose the lifting of the tariffs. In a letter to Agriculture Department officials last month, Ben Pratt, Mosaic’s senior vice president of government and public affairs, referred to rising fertilizer prices on “many events, including geopolitics.” as well as “supply disruptions, inflation and other countries”. which have restricted fertilizer exports to safeguard domestic supplies.

Pending a decision on the trade lawsuit or government action, the fertilizer tariffs will be in full effect until 2026.

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