Vilsack rolls out $500M in grants to lower fertilizer costs
MORE MONEY: Secretary of Agriculture Tom Vilsack provided new details on how USDA plans to offer $500 million in grants to increase domestic fertilizer production which eventually he believes will lead to more competition and lower fertilizer costs for farmers.
Fertilizer Production Expansion Program will invest $1 million to $100 million to boost domestic fertilizer production.
Jacqui Fatka | Sep 27, 2022
In an effort to address the rising input costs for farmers, especially for fertilizer, Secretary of Agriculture Tom Vilsack unveiled how USDA will offer $500 million in grants to expand access and spur innovation in the domestic fertilizer sector.
Earlier in the year, Secretary of Agriculture Tom Vilsack announced the opportunity to put together a $250 million initiative focused on expanding domestic fertilizer production while speaking at Commodity Classic, the annual meeting of the soy, wheat, corn and sorghum growers. While visiting an Illinois farm in May, Vilsack says President Joe Biden told him to double that amount, bringing the money to be invested to $500 million.
After going back to his staff to find the additional funds, Vilsack made the latest announcement on Sept. 27 at the National Association of State Departments of Agriculture meeting in Saratoga, N.Y. Specifically, the newly created Fertilizer Production Expansion Program will dedicate Commodity Credit Corporation funds, which normally pay for the farm bill safety net and conservation programs, to provide grants ranging from $1 million to as much as $100 million to independent operations to expand capacity and competition.
“We think it’s going to help reduce the cost, increase the supply and maybe generate opportunities for farmer-owned cooperatives as well to benefit,” Vilsack says of the impact of the grant money to support farmers. This is on top of a $40 million initiative through the Regional Conservation Partnership Program Vilsack announced in Michigan in August to improve farmer utilization of fertilizer including the adoption of the 4R Nutrient Stewardship program, which focuses on the right fertilizer source, at the right place, at the right rate, and at the right time.
Grants will be used to support independent, innovative and sustainable American fertilizer production to supply American farmers. Funds also will expand the manufacturing and processing of fertilizer and nutrient alternatives in the U.S. and its territories. Products must be produced by companies operating in the U.S. or its territories, to create good-paying jobs at home, and reduce the reliance on potentially unstable, inconsistent foreign supplies, USDA says in a statement on the program.
Vilsack says the grants also need to have a sustainable component. Ideally, products will reduce the greenhouse gas impact of transportation, production and use through renewable energy sources, feedstocks and formulations, incentivizing greater precision in fertilizer use.
USDA solicited comments from the industry on how to best allocate the funds, and Vilsack says the agency heard application processes should apply for those that can provide a more immediate impact versus another to benefit the longer-term building up of domestic fertilizer production.
Vilsack plans for a 45-day application window for applicants to receive priority for projects that increase the availability of fertilizer (nitrogen, phosphate or potash) and nutrient alternatives for agricultural producers to use in crop years 2023 or 2024.
That first window of applications will allow those facilities possibly under construction to accelerate their construction schedule in the 2023-2024 time period if they were successful in making a grant request.
The department will also offer an extended application window, providing an additional 45 days (90-day application window) to receive applications for financial assistance to significantly increase American-made fertilizer production to spur competition and combat price hikes. This extended application window will support applicants who need more time to make additional capacity available.
Vilsack says there are some fertilizer facilities ready to go that just need an extra push, and that first round of funds will give that extra push to them now. And then others will have a longer-term horizon and this assistance over time can help significantly increase capacity.
Industry welcomes additional support
The Fertilizer Institute President and CEO Corey Rosenbusch says the U.S. fertilizer industry consists of large international corporations, small regional producers, and everything in between. “They all play a critical role in suppling farmers with the nutrients required to grow the food that feeds the world,” Rosenbusch says. “While a nitrogen plant can cost between $2-$4 billion to construct, anything that helps strengthen domestic fertilizer production is a win for the industry, growers and consumers.”
Rosenbusch adds, “Innovation has been a hallmark of fertilizer producers as enhanced efficiency fertilizers (EEFs) and other new technologies play a big role in our ability to feed a growing population.”
Sustainability is also a key focus of the industry. Last year TFI announced its commitment to having 70 million acres of farmland under 4R nutrient stewardship by 2030.
“The world’s growing population depends on responsible agricultural practices to provide a steady supply of food,” Rosenbusch concluded. “Modern fertilizer techniques, such as 4R Nutrient Stewardship, precision agriculture, and enhanced efficiency fertilizers, are an essential part of this sustainable future, and TFI applauds the USDA investment in strengthening domestic fertilizer production capabilities, innovation, technology, and the responsible use of fertilizer by growers.”
The Department is hosting two informational webinars. Potential applicants and other interested parties are encouraged to attend a webinar on Oct. 4, 2022, to learn more about the program. Pre-registration is required.
Potential applicants and other stakeholders are also encouraged to attend a webinar on Oct. 6, 2022, to learn about application requirements. Pre-registration is required.
Potential applicants and stakeholders may email questions to fpep. Find more information online.