The High Costs of Growing Corn: How Growers are Squeezed by High Input Prices That Are Set by the Fertilizer Oligopoly
In this podcast, AAI President Diana Moss talks with two experts about corn, a leading U.S. crop. Many growers now face serious margin “squeezes.” They pay higher and higher prices to powerful oligopolies for inputs that are necessary to grow their crops. But growers then sell into markets where commodity prices are also often controlled by only a few firms, such as in animal proteins, and are subject to significant commodity price fluctuations. This episode of Ruled by Reason will focus on how growers are paying high prices for nitrogen fertilizer, a major input for growing corn. Economic studies, including a recent one authored by Dr. Joe Outlaw, a guest on this podcast, raise serious concerns about fertilizer prices. These prices have been set for years by a small group of powerful, global fertilizer producers. Other studies, including one done by AAI, indicate the likelihood that fertilizer producers more likely coordinate with each other, rather than compete. Anticompetitive fertilizer prices hurt corn growers and consumers, and imperil the stability and integrity of a vital agricultural supply chain. The podcast discussion touches on issues relating to the importance of fertilizer for growing corn for its many uses, how corn and fertilizer prices are related, the power of the fertilizer oligopoly, and how international trade issues exacerbate the situation.
Diana Moss, President, American Antitrust Institute
Dee Vaughan is a Texas-based corn, cotton, sorghum seed, and wheat grower and a long-time, proactive supporter of Texas and U.S. agriculture. He currently serves as a director of the Texas Corn Producers Association, the Texas Corn Producers Board, and the Southwest Council of Agribusiness. Mr. Vaughan has worked extensively on policy and regulatory issues in the areas of farm policy, energy, transportation, and trade.
Dr. Joe Outlaw is a Regents Fellow, Professor and Extension Economist in the Department of Agricultural Economics at Texas A&M University. He also serves there as the Co-Director of the Agricultural and Food Policy Center. Dr. Outlaw’s research is focused on assessing the impacts of farm programs, risk management tools, renewable energy, and climate change legislation on U.S. agricultural operations.