Crop input suppliers are under scrutiny in Canada and the United States for what some consider to be “monstrous” price hikes for their products.
U.S. secretary of agriculture Tom Vilsack recently asked the Department of Justice to ensure that those hikes are valid and substantiated.
“It’s important for us to ask questions about whether all of these increases, every penny of these increases, is justified based on disruptions, based on supply, based on the normal economics,” he said during a speech at the National Association of State Departments of Agriculture’s 2022 Winter Policy Conference, according to an AgWeb article.
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“I’ve been asked this question and we are asking it of the justice department — are all of these increases absolutely justified?”
Canada’s National Farmers Union is searching for the same answers north of the border. It has asked the House of Commons standing committee on agriculture and agri-food to launch an investigation into fertilizer price hikes.
“We really do need some direction and some leadership on this issue and I certainly hope the committee is going to provide it,” said NFU president Katie Ward.
Ag committee chair Kody Blois said the current priority is its study on supply chain issues and their impact on agriculture.
A subcommittee that sets the committee’s agenda will be reconvening once that study has been completed in about one month.
The NFU request may be discussed at that time, although he noted the next study scheduled on the agenda is environment and agriculture.
Blois said the subcommittee could decide that the fertilizer study should take precedence but that debate has yet to occur.
He said the NFU is the only farm group that has approached the committee about the fertilizer price issue.
The price of many fertilizer products and some key farm chemicals like Roundup have more than doubled over the past year or two.
Vilsack warned that input companies better be able to justify those types of increases.
“Shame on anybody who’s trying to take advantage of this circumstance,” he said.
Vilsack mentioned a recent Wall Street Journal article that quoted a seed company executive saying the company will raise prices to compensate for supply chain price increases “and then some.”
“Farmers don’t need, ‘and then some,’ right?” said Vilsack, according to a DTN article.
“What’s that all about? ‘And then some.’ What does that mean?”
Crop input providers have blamed the steep price hikes on the global pandemic, weather events, supply chain problems, rising natural gas and coal costs, protectionist government policies and other factors.
The NFU thinks it has more to do with profiteering than anything else.
Nutrien recently reported record fourth quarter net earnings that were four times higher than a year ago.
CF Industries had fourth quarter net earnings that were eight times higher than a year ago.
“Their prices are more than offsetting their higher energy costs,” said Ward.
She said farmers are feeling the pinch of “monstrous” input costs despite sky-high crop prices, which is why she is puzzled that their request for a parliamentary investigation hasn’t received more support from other farm groups.
“We haven’t heard from other organizations at this point,” she said.
Meanwhile, south of the border the justice department and the FBI announced on Feb. 17 a joint initiative to “deter, detect and prosecute those who would exploit supply chain disruptions to engage in collusive conduct.”
They will be investigating collusion in industries particularly affected by supply disruptions.
“The lingering challenge of supply chain disruptions from the COVID-19 pandemic has created an opportunity for criminals to fix prices and overcharge customers,” Luis Quesada, assistant director of the FBI’s Criminal Investigative Division, said in a news release.
“The FBI and our law enforcement partners will continue to collaborate and investigate schemes that violate our antitrust laws and stifle our economic recovery.”
