Bloomberg News

By Kim Chipman

Republican and Democratic lawmakers are raising alarms over the risk to American farmers if President Donald Trump’s planned tariffs on Canada include potash and other fertilizers. 

At a hearing Wednesday, Senator Amy Klobuchar of Minnesota, the top ranking Democrat on the Senate Agriculture Committee, said tariffs on Canadian potash could increase fertilizer costs for American farmers by as much as $1.70 an acre for corn and $1.42 an acre for soybeans. Earlier this week, Republican Senator Chuck Grassley of Iowa posted on X that he was pleading with Trump to exempt potash from any levies. A major fertilizer lobbying group is making the same appeal.

The proposed tariffs, currently on pause until early March, would come just as farmers are “trying to plan for an upcoming season,” Klobuchar said at the hearing. “While I support targeted tariffs, I have serious concerns about sweeping, across-the-board tariffs that threaten our farmers’ livelihoods,” she said. 

It’s hard to overstate the importance of fertilizer to agricultural supplies. Nearly every plate of food you touch has gotten there with the help of fertilizers. Even organic foods use animal manure and other nutrients. But it’s synthetic and mined fertilizers that are widely credited for how the world gets fed. A major global crunch in fertilizer supply was one of the major drivers of food inflation in 2021 and 2022.

In the US, potash is used in the production of corn and soybeans, the nation’s two biggest crops, and the country gets nearly all of the fertilizer by importing it from Canada, the world’s top producer. The risk of tariffs comes just ahead of when planting season typically kicks off in North America. 

Fertilizer costs could rise at a time when the global market is “already squeezed” by Western sanctions against Russia and Belarus, also key suppliers, Bloomberg Intelligence analysts analysts including Alexis Maxwell and David Zhong said in a note. 

Meanwhile, farmers are also contending with volatile crop prices, uncertainty around US agriculture policy and increased competition in the global market. If higher fertilizer prices prompt farmers to decrease applications, it could hurt crop yields and shrink harvests. There’s also the risk of a “demand shock” in the fertilizer market that leaves too much supply globally, according to Seth Goldstein, a Morningstar analyst. 

Canada, the world’s top potash producer and shipper, has the world’s biggest reserve of the fertilizer at 1.1 billion tons. That compares with global stockpiles of about 3.6 billion tons in 2023.