OMAHA (DTN) -- Farmers are calling for more price transparency in fertilizer markets as U.S. senators questioned whether the industry is taking advantage of farmers amid supply disruptions and price spikes tied to the war in Iran.

The U.S. Senate Agriculture Committee held a hearing on fertilizer market challenges on Tuesday as the committee prepares to draft its version of the farm bill, which will likely include new provisions tied to fertilizer price reporting and possible incentives to spur more domestic production.

Senate Agriculture Committee Chairman John Boozman, R-Ark., described fertilizer shortages facing farmers as a "national security issue" that needs to be addressed in the long term.

Democrats on the committee also repeatedly used the hearing to question the war in Iran and the subsequent closure of the Strait of Hormuz. Sen. Amy Klobuchar, D-Minn., pointed to the impact the conflict has had on fertilizer prices since the war began at the end of February.

"They were high before the war started, but I will note that there is a direct link between the recent escalations and this war," Klobuchar said.

CALL FOR MORE FARMER AID

Eddie Melton, president of the Kentucky Farm Bureau Federation, called for Congress to provide a new relief package beyond the Farmer Bridge Assistance (FBA) payments issued by USDA in March. He pointed to a Farm Bureau survey showing 78% of farmers in Southern states were unable to afford all of the fertilizer they need this spring.

"Congress should act now with additional economic assistance to help farmers manage today's cost pressures, prevent future financial strain and stabilize operations while longer-term fixes are put in place," Melton said.

While Melton and others noted the fertilizer price challenges did not begin with the war in Iran, he said the disruptions in the Strait of Hormuz have exacerbated farmers' economic challenges. Since early March, anhydrous ammonia prices are up 33%, while urea prices are up 55%.

"Meanwhile, many farmers are operating with little or no working capital, limiting their ability to manage risk or invest in future production." Melton said.

Discussing challenges facing younger people trying to get into agriculture, Melton said, "We have to do something to try to stabilize this market and make us profitable again."

PRICE TRANSPARENCY NEEDED

It is likely that once a new farm bill is completed, USDA will be directed to provide more transparency over fertilizer prices with some form of official price reporting.

Sen. Majority Leader John Thune, R-S.D., and Klobuchar have a bill that would create mandatory price reporting for fertilizer.

Trent Kubik, president of the South Dakota Corn Growers Association, said price reports would need to examine how large manufacturers also own distributors and retailers. There is limited publicly available research examining fertilizer distribution and supply chains, he said. He noted that fertilizer profits are going up even as their own inputs increase as well.

"When my input price goes up, my profit margin shrinks ... it's unclear to corn farmers in South Dakota how the opposite is possible for the fertilizer industry," Kubik said.

Industry vertical integration also has not led to efficiency gains being passed on to farmers, Kubik said. Fertilizer companies have been known to basically dock barges of fertilizer supplies rather than releasing those products to lower prices, he said.

"Instead, our experience is that the integration has resulted in the largest fertilizer companies locking up and leveraging distribution channels, entrenching their dominant positions and extracting excessive profits from farmers and consumers," Kubik said.

Sen. Tina Smith, D-Minn., pointed to windfall profits by fertilizer companies after the Ukraine war began and suggested the need for a windfall profits tax.

Kubik noted recent reports about high profits by fertilizer companies since the conflict with Iran began.

"This is in the last week we've seen similar reports of massive profits," Kubik said. "And that's the thing that we feel the worst about is, during this last 75 days, a lot of money was being made, but it wasn't by farmers."

TRIALS OF BUILDING OUT FERTILIZER PLANTS

Joshua Westling, CEO of J. Westling & Co., told senators about his company's plans to build a nitrogen plant, Project Meadowlark, in Gothenburg, Nebraska. Westling's company started plans six years and right now would ideally have the plant online in 2029.

The new plant would produce 365,000 tons of ammonium nitrate and 140,000 tons of ammonium thiosulfate, as well as 50,000 tons of diesel exhaust fluid.

Discussing past projects, Westling noted only three new major nitrogen plants have been built in the past 30 years, due to challenges with both permitting and financing projects. To change that, Westling said federal agencies would need to better coordinate both permitting and finance programs to accelerate the pace of fertilizer projects.

"If Congress and the administration believe domestic fertilizer production is critical to American food and national security, then we should act like it," Westling said.

Westling also said there is a lack of expertise when it comes to building out fertilizer plants. It can also take as much as $100 million just in designing and planning before signing contracts for construction. He suggested this is an area where a government program could help.

"That upfront capital cost to bridge to the point where you've got certainty to be able to execute and give certainty to investors and lenders, I would say, is the biggest challenge," Westling said.

Corey Rosenbusch, CEO of The Fertilizer Institute, said regulations remain a major challenge. It can take seven years to permit a nitrogen plant and 10 years to permit a phosphate mine.

"It is really hard to build new capacity in this country," Rosenbusch said.

TRUMP ADMINISTRATION PLAN

Agriculture Secretary Brooke Rollins and other Cabinet members at the end of April discussed using Commerce Department funds to expand fertilizer production. Rollins also said USDA would reopen the Biden-era Fertilizer Production Expansion Program (FPEP).

Andy Green, principal for Center Market Strategies and a former USDA adviser in the Biden administration, pointed to the FPEP investing as much as $778 million for more than 100 projects that were expected to add as much as 13 million tons in new fertilizer production.

Westling said the FPEP had good intentions to incentivize production, but perhaps a diverse mix of smaller projects might not be needed.

"I don't think there are 20 or 30 projects that need to be built," Westling said. "I think it's a handful in place to augment the larger production, but bringing dollars to those projects would absolutely be impactful."

SULFUR AND PHOSPHATE CHALLENGES

Sen. Roger Marshall, R-Kan., also criticized fertilizer company Mosaic Co. for its plans to scale back domestic phosphate production. At the same time, Mosaic supports keeping 16.6% countervailing duties on Moroccan phosphate that have been in place since 2021.

Sen. Chuck Grassley, R-Iowa, also said the Trump administration should drop the duties on Moroccan phosphate. Currently, the Commerce Department is conducting a five-year review of those duties.

Mosaic said on Monday the company is scaling back phosphate production in the United States and Brazil.

"Mosaic is closely monitoring raw material markets, particularly sulfur, which recently hit record prices because of limited availability," the company said in a news release.

Mosaic's decision drew criticism from groups such as the American Soybean Association (ASA). The group's president, Ohio farmer Scott Metzger, did not testify on Tuesday, but ASA did issue a news release saying Mosaic's decision was "unsettling news" at a time when farmers face significant economic headwinds.

"This is the worst time possible for Mosaic to decrease domestic phosphate production. High sulfuric acid costs are disrupting the global fertilizer market, and farmers are ultimately paying the price through higher input costs," Metzger said.

Rosenbusch noted the closure of the Strait of Hormuz has disrupted half of the world's sulfur exports. Roughly half of all sulfur produced is used for phosphate fertilizer. The spot market for sulfur is now $1,300 a ton, and China is buying large amounts to use for mining operations.

"We're now at a point where sulfur costs along are significantly higher than the cost of phosphate. And you've seen around the world right now, phosphate mines around the world are reducing production because of this price impact," Rosenbusch said.

For more, see "UAN, Anhydrous Lead Fertilizer Prices Higher in Last Week of April" here: https://www.dtnpf.com/…

Also see "Ag Secretary Rolls Out Fertilizer Strategy Amid Pressure Over Prices" here: https://www.dtnpf.com/…

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

Follow him on social platform X @ChrisClaytonDTN

(c) Copyright 2026 DTN, LLC. All rights reserved.