On September 27th, the U.S. Department of Agriculture (USDA) announced they will give away $500 million in grants to support independent American fertilizer production on U.S. soil. Funds are available through the Commodity Credit Corporation.
The new program, Fertilizer Production Expansion Program, or FPEP, is set to help increase domestic production of fertilizer, and support “independent, innovative and sustainable American fertilizer production” to help supply American farmers.
The USDA Secretary Tom Vilsack said, “Under the leadership of President Biden and Vice President Harris, USDA is creating a resilient, secure and sustainable economy, and this support to provide domestic, independent choices for fertilizer supplies is part of that effort. USDA believes in the growth of innovative, local businesses owned and shared by people who can best serve their own unique community’s needs, fill gaps, and build opportunities. Recent supply chain disruptions have shown just how critical it is to invest in the agricultural supply chain here at home.”
The funding will also help to expand U.S. manufacturing and processing of fertilizer and nutrient alternatives.
Here’s The Details
The minimum award is $100 million, and the minimum award if $1 million, and is issued under a five-year term.
The Fertilizer Production Expansion Program’s application window closes on November 14 for the first round, and the second round closes on December 29th.
Applicants must operate within the U.S. or it’s territories, be registered with the System for Award Management (SAM), and must manufacture in accordance with all Federal and local regulations.
Applicants can visit the grants website to apply.
What Will Happen to the Crops?
Fertilizer prices in America have doubled since 2021 because of the state of the world, mainly the Russia-Ukraine war, limited supply of minerals, global demand, and high energy costs. The USDA states there is also a lack of competition.
Last March the Biden-Harris administration promised a $250 million investment in grants for fertilizer made in the U.S. but has since doubled it to $500 million.
According to the AG Web, the U.S. ranks in the top three for fertilizer imports, where most components come from Russia, Canada, Morocco, and China.
The prices for phosphorus, potassium and nitrogen fertilizers are much higher than just one year ago, and farmers fear fertilizers may be in short supply.
Fertilizer prices are trending higher for the fall, causing anxiety and worry for the potential farm income for 2023. For example, in the fall of 2021 fertilizer was $800 per ton, and in the spring of 2022, a ton was listed as $1,500.
A company in Iowa, producing ammonia which is sometimes used in fertilizer, opened up just a few years ago.