From fertilizer to meatpacking: expanding options in concentrated markets
From fertilizer to meatpacking: expanding options in concentrated markets
A news briefing from Farm Action’s policy team
| Oct 26 |
USDA announces $573 million investment to expand domestic fertilizer production
What happened: The United States Department of Agriculture (USDA) announced $573 million in proposed funding for eight fertilizer manufacturing projects across 16 states. The projects would generate more than $1.3 billion in total investment and add over one million tons of annual domestic production capacity. USDA estimates the additional supply could reduce nitrogen fertilizer prices by 4.4% and potash prices by 5.3%.
Source: USDA
Why it matters: Fertilizer is one of farmers’ largest expenses, yet a handful of companies control most of the market. Those companies have reaped enormous profits as farmers struggle with rising costs. CF Industries, for example, reported an 88% year-over-year increase in second-quarter profits, driven largely by higher fertilizer prices even as sales volumes declined.
USDA’s investment could help change that equation by expanding domestic production and giving farmers more supply options. Combined with strong antitrust enforcement, greater competition could help bring fertilizer prices down and keep more money in farmers’ pockets.
USDA announces $5 billion loan program to expand independent meat processing
What happened: The United States Department of Agriculture (USDA) announced a $5 billion loan guarantee program to expand independent meat, poultry, and seafood processing. The Strengthening Processing for U.S. Ranchers (SPUR) program would guarantee 90% of eligible commercial loans, up to $175 million per borrower, to help processors open, expand, or modernize facilities. The program excludes the largest processors and is pending congressional approval of funding.
Source: USDA
Why it matters: Four companies control roughly 85% of beef processing, leaving ranchers in many regions with just one or two buyers bidding on their cattle. Without enough buyers competing for their livestock, ranchers struggle to earn a fair return, contributing to the decline of the U.S. cattle herd to its lowest level in decades. Expanding independent processing will give ranchers more options and strengthen competition. But rebuilding a competitive cattle market will also require strong antitrust enforcement and protections against unfair meatpacker practices.
Written by Sarah Carden
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