More reports after Tuesdays Congressional hearing on consolidation hurting rural America.

https://www.brownfieldagnews.com/news/senate-committee-hears-concerns-over-rising-costs-tied-to-ag-industry-consolidation/

 During a Senate Judiciary Committee hearing on Tuesday, American Soybean Association President and Kentucky farmer Caleb Ragland told lawmakers prices have skyrocketed since 2020 while commodity prices have fallen. “In just 5 years, seed prices have increased by 18 percent, fertilizer by 37 percent, pesticides by 25 percent, machinery by 23 percent and interest expense by 37 percent.”

Iowa farmer and small ag business owner Noah Coppess says the lack of price transparency in the fertilizer industry drives up costs. “We struggle with the supply chain’s willingness to sell us product due to our low volume and competition with their bigger customers. In our area, there are several retail locations to buy fertilizer from. However, there are very few wholesale options.  Regardless of who I work with, we will be competing with bigger customers and struggle to gain access.”

Corey Rosenbush, President and CEO of The Fertilizer Institute, says geopolitical conflicts are creating supply and demand issues. For example, “China is the world’s largest producer of fertilizers with about a third of all nitrogen and about 40 percent of phosphate production. They are currently restricting their exports forcing growers to source those tons elsewhere.”

And, he says, “Conflicts in the Middle East have interrupted Egyptian and North African nitrogen operations due to natural gas supply which is the feed stock for nitrogen largely coming from Israel. When Iran’s nuclear facilities were destroyed it also seriously disrupted their fertilizer production. Iran is the world’s second largest supplier of urea behind Russia.”

John Latham owns a seed dealership in north-central Iowa and says royalty costs have gotten out of control. “Unfortunately, many independent companies are going out of business as these multinational companies are becoming more powerful, and frankly, predatory. The seed corn industry is 90 percent controlled by two companies. Ninety percent, including their own brand and licensing.”

President and CEO of the American Seed Trade Association Andy LaVigne says there is a path forward to improve prices for farmers and seed producers. “Our advocacy applies to plant breeding innovations like gene editing and biotech crops. Reform is needed to ensure rapid pace of scientific innovation is not hampered by unjustified regulatory obstacles.”

Diana Moss, Vice President and director of competition policy with the Progressive Policy Institute says the factors eventually increase costs for consumers. “In light of these troubling trends, I believe we need to widen the lens on competition on agricultural inputs.  Anti-trust’s role has been less than exemplary as concerns over excessive consolidation in ag biotech and potential price fixing in fertilizers has gone largely unpursued.”

All of the witnesses testified that unchecked consolidation also impacts the long-term health of rural economies.

From NCGA..

https://ncga.com/stay-informed/media/the-corn-economy/article/2025/08/high-production-cost-series-part-3

Three critical inputs make up 73% of the operating costs for growing corn: seed, chemicals and fertilizer. These inputs comprise more than one-third of the total costs to grow corn.

Seed costs per acre have increased 135% since 2007 to a projected cost of $115 per acre for 2025.

Some increase in seed costs can be attributed to improvements in genetics and breeding techniques that have contributed to greater productivity over time. However, the per bushel cost of seed has also nearly doubled. On average, seed costs divide out to $0.33 per bushel for 2007 and $0.61 per bushel for 2025, an 88% increase per bushel.  In other words, even with higher yields, seed costs have increased more than is offset by an increase in yield.

Attributing the full value of higher yields to seed costs only results in a small offset in increased seed costs. 

Chemical costs increased 117% since 2007 to a projected cost of $53 per acre for 2025.

According to the " target="_blank" title="https://www.nass.usda.gov/Surveys/Guide_to_NASS_Surveys/Chemical_Use/">">https://www.nass.usda.gov/Surveys/Guide_to_NASS_Surveys/Chemical_Use...USDA Agricultural Chemical Use Program data, herbicides account for over 90% of chemical pesticide use on corn acres and average herbicide use per acre is roughly the same as in 2007. But fungicide use has changed; fungicides for corn became widely available in the mid-2000s. USDA data shows fungicide was used on 8% of corn acres in 2010, the first year this figure is available, and 19% of corn acres in 2021, the most recent year available. Given the prevalence of fungal concerns in fields and benefits fungicides provide to corn crops, it’s likely fungicide use on corn acres has continued to increase. Based on the Crop Protection Network " target="_blank" title="https://cropprotectionnetwork.org/fungicide-roi-calculator">">https://cropprotectionnetwork.org/fungicide-roi-calculator">Fungicide ROI Calculator, twelve corn fungicide options range in price from $19 to $37 per acre, which alone could account for the increase in farm chemical costs since 2007.

Fertilizer costs increased 74% since 2007 to a projected cost of $162 per acre for 2025.

Farmers must sell record amounts of corn to purchase MAP, DAP, UAN 28%, UAN 32% and Urea fertilizer to meet their fertility needs. 

Fertilizer makes up 36% of operating costs and 18% of the total cost to grow corn. Higher fertilizer prices hit farm budgets hard given its magnitude as a cost item.

Current retail fertilizer prices are well below the 2022 spike but above the average price level of the previous decade and rising further. In 2025, retail prices for potash and phosphate fertilizers DAP and MAP rose 9-12%, while retail prices for nitrogen fertilizers urea, UAN 28%, and UAN 32% rose 40-43%. High fertilizer prices may be attributed to numerous factors such as tariff uncertainty, ongoing countervailing duties on fertilizers, geopolitical issues, and constrained market flows.

The cost of fertilizer relative to corn is elevating concern. Compared to the 2012-to-2021-decade average price when retail fertilizer prices were fairly stable, current prices are over 50% higher for phosphate fertilizers, and at least 40% higher for nitrogen fertilizers urea, UAN 28% and UAN 32%. Current corn prices are 15% lower than the decade average daily price. Farmers are selling many more bushels of corn to buy the same one ton of fertilizer. 

 

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