U.S. Department of Agriculture Secretary Tom Vilsack announced that USDA is partnering with American businesses as part of President Biden’s Investing in America Agenda to increase innovative domestic fertilizer production, creating jobs in rural communities and providing more options to U.S. farmers.
“The rapid increase in the cost of critical inputs like fertilizer is only the latest example of why we must invest in strong, domestic agricultural supply chains,” Vilsack said. “The Fertilizer Production Expansion Program not only increases fertilizer production and improves competition, but also creates new opportunities for American businesses and is one of the many ways that the Biden-Harris Administration is making long-term investments to strengthen our supply chains.”
In 2022, USDA made $500 million available under the Fertilizer Production Expansion Program to spur domestic competition and combat rising fertilizer costs caused by the war in Ukraine. The Department received applications from more than 350 businesses seeking to increase fertilizer production.
Due to the strong demand for funding, the Commodity Credit Corporation is providing up to $400 million in additional FPEP funding to finance even more projects that will promote competition in agricultural markets.
New Project Selections
As part of this effort, USDA is inviting public comments on 66 projects eligible to receive grants to increase fertilizer production. The Department will only consider projects that adhere to federal policies designed to protect the environment and historic properties.
USDA is seeking comments that assess how well each applicant plans to:
- Incorporate social, economic, and environmental considerations into decision-making and planning processes.
- Protect cultural and historic properties, including those on Tribal lands, from potential impacts.
Comments must be submitted to [email protected] by July 22. For more information, visit this link.
USDA expects to announce final project selections in the coming months.
Round One Awards
Today, the Department is also awarding $30 million in grants through seven awards under round one of the program to help U.S. farmers in Florida, Iowa, Louisiana, Minnesota, Montana, Texas and Wisconsin increase independent, domestic fertilizer production.
The grants will create a competitive, resilient, and sustainable economy that will support opportunities for local businesses and people across the nation. Some examples include:
- Black’s Valley Ag Supply Inc. will build a new dry fertilizer production and storage facility in Durand, Wisconsin. The production plant expects to increase fertilizer production by 33% per year.
- Farmer’s Union Oil Company will expand a fertilizer processing facility in rural Montana. This project will create a local and affordable fertilizer option for agricultural producers in a four-county region while saving and creating several local jobs.
- Progressive Ag Cooperative will construct a dry fertilizer facility that will serve cooperative members from northern Iowa and southern Minnesota.
This round of awards is part of the list of 21 potentially viable projects USDA released in January 2023.
Fertilizer prices more than doubled between 2021 and 2022 due to many factors. These factors include the war in Ukraine, a limited supply of the relevant minerals, high energy costs, high global demand, and agricultural commodity prices, reliance on imports, and a lack of competition in the fertilizer industry.
To combat these issues, USDA began accepting FPEP applications in September 2022. The Department initially announced plans to make $250 million in grants available but quickly doubled the available funding to $500 million to address rising costs and spur competition. USDA is now adding up to an additional $400 million.
The Department received requests for $3 billion in applications from more than 350 businesses for the first two rounds of the program. The businesses were located in 47 states and two territories.
In January 2023, USDA released a list of 21 potentially viable projects for the first round of funding with a request for public comment. The first round focused on projects that will increase fertilizer capacity for the 2023 or 2024 crop years, to prioritize projects with near-term impact.
In March 2023, Secretary Vilsack announced that USDA offered a total of $29 million to eight businesses in Alabama, Colorado, Massachusetts, Missouri, Ohio, and Washington. The grants will help the businesses modernize equipment, advance climate-smart practices and build production plants, among other activities.
