MCKINLEY, Texas (DTN) -- The chairman of the Federal Trade Commission (FTC) told a group of farmers Thursday the commission is investigating anticompetitive behavior in the fertilizer industry. But he said the FTC would need their help to bring a case against the industry.

More than 100 corn farmers from as many as 18 states organized their own field hearing with FTC staff and Chairman Andrew Ferguson at a farm in Grayson County, Texas, about an hour north of the Dallas metro area. Farmers pointed to consistently high fertilizer prices while arguing that a small number of fertilizer suppliers are profiting at the expense of hundreds of thousands of family farmers.

Ohio farmer John Settlemyre told Ferguson and FTC staff the event included corn, cotton, soybean and rice farmers who took time out in the middle of planting season to attend Thursday's hearing. The fertilizer industry has basically been built on four decades of consolidation that have left retailers unable to buy product from new market entrants over fear of retaliation.

"We want the commission to understand how the price moves here in the United States," Settlemyre said. "We want them to understand what substitution looks like when there isn't any."

In a speech, Ferguson told farmers the FTC has launched an investigation into the fertilizer industry, "including the issuance of the compulsory process," meaning the commission is issuing subpoenas for industry information. Ferguson pointed to USDA data showing the single-largest rise in input costs for farmers since 2020 has come from fertilizer prices.

"These continued price increases are not something our nation, much less our farmers, can continue to ignore," Ferguson said. "High prices, of course, do not always mean something illegal is going on, but when an industry has rapidly consolidated with just a few corporations now controlling a substantial majority of the fertilizer sales in the United States, we cannot rule out the possibility that the sustained price increases for fertilizer may be the result of anticompetitive conduct on the part of these companies."

Farmers gave Ferguson a standing ovation.

Fertilizer prices have grabbed the attention of the federal government in several ways this spring. Agriculture Secretary Brooke Rollins has reopened a fertilizer program created under the Biden administration, while officials have announced they will loosen permit requirements for new projects. Congress is also looking at changes to the farm bill to help expand production and fund fertilizer price reports at USDA.

FARMERS SHARE STORIES, FEARS ON PRICE IMPACTS

While the attack on Iran at the end of February caused the latest price spike, farmers said they have been facing exorbitant fertilizer costs since the COVID pandemic hit in 2020.

"My fertilizer prices spiked in 2020-2021 during COVID, and they have stayed up there," said Mark Mueller, president of the Iowa Corn Growers Association.

Mueller noted he prepaid for anhydrous ammonia in January at $795 a ton, "and I thought I was getting ripped off." After the war began, the price continued to rise. By mid-March, the average retail anhydrous ammonia price had moved to $950 a ton and now tops more than $1,100 a ton.

"It is still up. The main time for applying has passed, but the price is still going up," Mueller said.

DTN's Retail Fertilizer Trends put the average retail price for a ton of anhydrous last week at $1,118 a ton, up $2 from a week earlier.

Nick McMichen, an Alabama farmer and board member for the National Cotton Council, said fertilizer prices are such an important issue that farmers feel they have no option but to turn to the commission and federal officials for help.

"People are having to make agronomic decisions because they are unable to get financing," McMichen said, adding that farmers are mining their soils to try to stay in business. "We are in a farm crisis."

At the same time, McMichen said, fertilizer companies have sent $20 billion back to shareholders over the past five years while farmers cannot make it financially. "That is wrong. That is absolutely wrong."

McMichen added that younger people either are choosing not to farm or are exiting the business. "We're losing a generation because they cannot see how they can make a financial living."

Arkansas farmer Joe Mencer said fertilizer companies squeezed out small, local cooperatives by selling fertilizer cheaper than the cooperatives could buy it. That led farmers to turn away from their cooperatives, which made things worse.

"They would do a special deal with the producers to get them away from that co-op," he said, adding, "After we were gone, the fertilizer prices would go back up."

Mencer added, "These guys are making huge profits, while we are all sitting here with record losses."

Supply is not necessarily a problem, either. Lance Lillibridge, an Iowa farmer who acted as moderator for the panel discussion, asked farmers if they have faced actual shortages of fertilizer supply. Just a few raised their hands. The bigger question is how fertilizer companies are setting their prices, he said.

"(We ask), who is actually setting the price, and we don't get an answer," Lillibridge said. "Who is actually setting the price?"

Farmers also explained there are no real substitutes for basic fertilizer needs. Brett Grauerholz, vice president of Kansas Corn Growers Association, told commissioners the fertilizer manufacturers also operate the agricultural retail operations in his area. He also noted he has been doing several field trials with biological products and nitrogen inhibitors.

"There is no replacement that can bring us the revenue and yield that we need to pay our bills like N, P and K," Grauerholz said. He added, "Right now, I am farming just to make it to next year."

Grayson County, Texas, farmer Chad Wetzel, a Texas Corn Producers Association board member, hosted the meeting. He said a lot of the comments made by other farmers are the same he faces every day on his own farm.

"Finances are as tight as I've ever seen in the 20 years since I've been back on the farm, and a lot of it has to do with fertilizer prices," he said. "That's the No. 1 input that you can't farm without, but we have got to have a price that at least allows us the chance to make a profit."

CURRENT FTC AG CASES PENDING

Ferguson also told farmers about two current cases the FTC is already litigating for farmers. The FTC sued Deere & Co. early last year, arguing the manufacturer is restricting farmers' right to repair their own equipment. The FTC and 12 states also have a case pending against Corteva and Syngenta over restrictions they have placed on distributors and agricultural retailers to qualify for their loyalty programs. The FTC also alleges the two companies are blocking retailers from selling generic pesticides.

Ferguson said the cases reflect "monopolistic behavior" that hurts not only farmers but drives up the prices consumer pay at the retail stores.

"Rather than engaging farmers on equally and mutually beneficial terms, we believe these companies are trying to reduce farmers to servitude, using their market power to appropriate an ever-increasing amount of more gains," he said.

FTC CHAIR STRESSED NEED FOR EVIDENCE

While offering encouraging news to farmers, Ferguson and his staff also said they need hard evidence about industry practices, which includes gathering information from agricultural retailers about potential retaliatory practices.

"We need evidence on the ground, people who are willing to provide it and people eventually who are willing to tell a judge and jury what the evidence is," Ferguson said.

People downstream from the problem need to describe what is happening and be willing to talk to the FTC, he said. But Ferguson and others noted that that is often easier said than done. Antitrust cases are the hardest civil cases to try because of complicated numbers and complicated facts, he said.

"You can't win a case unless people are willing to say what is happening or what is about to happen," Ferguson said. He added, "There is no other way to win these cases. ... We're only as good as the evidence we find, and that's why we need your help."

Ferguson added that the FTC cannot afford to bring a case to court that it does not have strong evidence to get a win. "If we have to sue these guys, it's going to be me and my little agency up against 10 (law) firms and $1 billion," he said.

For more, see "DTN Retail Fertilizer Trends, Some Fertilizer Prices Fall for First Time in 14 Weeks" here:

https://www.dtnpf.com/….

Also see "Senators Question Fertilizer Supplies, Profits as Farm Economy Struggles Continue" here: https://www.dtnpf.com/….

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on social platform X @ChrisClaytonDTN

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