Concerns are growing about how fertilizer prices are set, with USDA officials pointing to limited competition in key segments of the market. Deputy Agriculture Secretary Stephen Vaden says the issue comes down to price discovery. “The way price discovery generally works is you have multiple competitors in the marketplace, and it’s through their competition we find what the appropriate market price is, and consumers generally rely on that,” Vaden said. However, he notes that dynamic may not exist in parts of the fertilizer industry. “When it comes to several of these fertilizer markets, we have at times two companies that control 90 percent of the market.” That concentration raises questions about whether prices truly reflect market conditions. “Do we really know what the market price is, because do they have the incentive to go against one another as if we had five players, six players, more players?” Vaden says the Department of Justice and Federal Trade Commission are investigating fertilizer companies and their business practices, while the USDA is encouraging farmers to share their experiences.
