Letter to John Seeba, Inspector General of the Federal Trade Commission, Re: Record Fertilizer Prices
Letter
Letter to John Seeba, Inspector General of the Federal Trade Commission, Re: Record Fertilizer Prices
Johnson Urges Action on Record Fertilizer Prices
Asks Federal Trade Commission to investigate record increases
U.S. Senator Tim Johnson (D-SD) today urged the Federal Trade Commission to investigate skyrocketing fertilizer prices, which have increased in recent years despite steady supply. The record increases are hurting the bottom line of producers across South Dakota, and prices are expected to increase this year.
"Fertilizer prices have been rising at an alarming rate despite steady demand. The high costs have been strapping our producers and forcing them to tighten an ever shrinking budget," Johnson said. "The Federal Trade Commission should take immediate action to ensure that producers across Rural America are not being unfairly overcharged."
According to the United States Department of Agriculture (USDA), fertilizer prices are up a record 168 percent since 2000. In 2007 alone, fertilizer prices have surged by more than 65 percent, and USDA projects a 16 percent rise in prices in 2008.
A Copy of the Letter is Below:
John Seeba
Inspector General
Federal Trade Commission
Washington, D.C. 20580
Inspector General Seeba:
I write on behalf of producers in my home state of South Dakota who have expressed concern regarding skyrocketing fertilizer prices. I am extremely concerned about the effect that rising fertilizer costs is having on rural America and question if the fertilizer industry is unfairly overcharging producers. I strongly urge the Federal Trade Commission (FTC) to investigate the cause of these inflated prices.
As you may know, production agriculture has seen dramatic rises in input costs in recent years, with increasing costs of fuel by 43%, seed by 30% and pesticide and herbicide chemicals by 3.8%. However, in 2007 alone, fertilizer prices have surged by more than 65%. According to the United States Department of Agriculture (USDA), fertilizer prices are up a record 168% since 2000 and USDA projects a 16% rise in prices in 2008. Such significant changes in the cost of basic inputs can dramatically impact a farmer's bottom line, given that the producer alone must absorb the increasing cost of production.
Farmers throughout the world depend on fertilizer for good crop yields. The demand for consistent and reliable harvests has never been greater, and ensuring adequate access to inputs is a fundamental component of both national and international food security.
The fertilizer industry attributes price spikes to decreasing supplies and a growing demand. However, according to the U.N.'s Food and Agriculture Organization, the world's fertilizer supply will be able to meet growth demands through at least 2012. Such dramatic price increases without significant shifts in demand is cause for concern and I strongly encourage the FTC to explore this issue further to ensure that our farmers are paying fair prices.
I thank you in advance for your prompt attention to this critical matter.
Sincerely,
Tim Johnson
United States Senator
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