USDA grants may help Indiana farmers move on from foreign fertilizer, spur U.S. production

Hoosier farmers faced with rising fertilizer costs may not need to rely so heavily on imported fertilizers in the future after the U.S. Department of Agriculture announced a new $250 million grant program.

The investment will support independent and innovative fertilizer production that’s farmer-focused and uses sustainable practices.

The grants will be awarded to American companies producing fertilizer in the U.S. But the new products won't hit the market in time for this year's crop season in Indiana.

“Recent supply chain disruptions from the global pandemic to (Russian President Vladimir) Putin’s unprovoked war against Ukraine have shown just how important it is to invest in this crucial link in the agricultural supply chain here at home,” USDA Secretary Tom Vilsack said in a statement.

The funds are supplied by the USDA’s Commodity Credit Corporation, which is meant to support farm income and pricing, and were set aside in September to protect the market from disruptions.

Applications will open in the summer with the first awards expected to roll out before the new year.

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Indiana isn’t home to many raw fertilizer product producers, but Department of Agriculture Director Bruce Kettler said it’s always good when production is brought closer to home.

“Doing it close to home and doing it here in America gets us away from the supply chain concerns we have now like long lead times and relying on stuff to come from overseas,” Kettler said. “If we can find a way to bring that back to Indiana it will add value to products and add value to commodities we raise in Indiana, which keeps jobs here and the investment stays here.”

Kettler cited Hello Nature, an organic fertilizer producer, as one example. Hello Nature is teaming up with MPS Egg Farms to construct a $50 million facility in Wabash. The operation, Bionutrients, will produce specialty fertilizer in its 300,000-square-foot facility.

“We believe that this new production facility will be a turning point for the North American market,” Luca Bonini, Hello Nature’s CEO, said in a statement. “Today the fertilizer industry undergoes multiple challenges such as rising prices, logistics issues and shortage of inputs, and there is a desperate need for innovative solutions to feed a growing population with less inputs and less land available.”

Kettler said it’s these kinds of independent makers he hopes the USDA grants attract.

“Hopefully this new program will look at finding ways to innovate where products can be used,” Kettler said. “Hopefully this program will spur some more innovation.”

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Global fertilizer use increased 5.2% year-over-year from the 2019-20 growing period to 2020-21, the largest increase in a decade, according to an August 2021 report from the International Fertilizer Association. That growth is expected to cool this year.

Fertilizer prices, especially nitrogen-based products, began to increase in the summer of 2020, with dramatic rises mid-2021, due to a combination of external factors including rising natural gas costs, shipping rate increases and a hurricane knocking out production plants in the south.

The USDA also pointed to Russia’s price hike, a limited supply of minerals and a lack of competition in the fertilizer industry.

“As I talk to farmers, ranchers and agriculture and food companies about the recent market challenges, I hear significant concerns about whether large companies along the supply chain are taking advantage of the situation by increasing profits — not just responding to supply and demand or passing along the costs,” Vilsack said in the statement.

Randy Kron, president of the Indiana Farm Bureau, said in an email to the IndyStar that rising input costs have caused many Hoosier farmers to worry about the financial viability of their operations.

“The recent announcement of USDA grants that would invest in American-grown fertilizer has eased a lot of those concerns,” Kron said. “Not only would it be nice to not be so dependent on foreign countries for our fertilizer needs, but anytime we can assist in the economic development of our rural communities and increase our domestic supply of fertilizer it’s a benefit to farmers.”

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Under President Joe Biden’s administration, the USDA is putting more emphasis on “resilient” local and regional production, the agency said in the statement.

In addition to the grant program, the department will open a public inquiry looking for information on agricultural inputs, fertilizer and retail markets.

The public will have 60 days to submit comments once the inquiry is published in the Federal Register at regulations.gov.

Karl Schneider is an IndyStar environment reporter. You can reach him at karl.schneider@indystar.com. Follow him on Twitter @karlstartswithk

IndyStar's environmental reporting project is made possible through the generous support of the nonprofit Nina Mason Pulliam Charitable Trust.