By Russ Quinn

DTN Staff Reporter

OMAHA (DTN) -- The Fertilizer Institute (TFI) and Fertilizer Canada are hailing the announcement Tuesday of a bipartisan agreement on the United States-Mexico-Canada Agreement (USMCA). Once ratified, the agreement will protect the interests of farm customers across North America who depend on cost-effective fertilizer products throughout the three countries, according to a TFI news release from Wednesday.

TFI and Fertilizer Canada urge the swift passage of USMCA by both the U.S. House of Representatives and Senate as well as the Canadian House of Commons and Senate. Passing this agreement will strengthen existing trading relationships, the release stated. It added this will be done by expanding market access for additional products and enhance innovation by encouraging international cooperation on agricultural biotechnology.

POLICY AFFECTS TRADE

The topic of trade and other policy uncertainties was a subject touched upon by several speakers at the 2019 Fertilizer Outlook and Technology Conference, put on by TFI and the Fertilizer Industry Round Table back in mid-November in Savannah, Georgia. Uncompleted trade deals, the U.S./China trade dispute and trade actions such as the U.S. sanctions against Iran all can have lasting effects on the global fertilizer market.

Fiona Boyd, director of Houston-based Acuity Commodities, said during her sulfur outlook presentation at the conference these trade uncertainties are bearish for global fertilizer supply and demand. Both geopolitical and environmental policy issues can have an effect on the industry, she said.

"Outside forces which are not fundamentally driven can have a negative impact on the market," Boyd said.

Michel Prud'homme, retired senior sirector at International Fertilizer Association (IFA), said during his presentation on the global nutrient supply outlook one of the main fertilizer supply drivers in the global fertilizer market is policy. This can be in the form of trade policy, export taxes or domestic investment policies, he said.

He specifically mentioned the U.S. trade sanctions against Iran. This policy has had a huge effect on Iranian nitrogen exports, which are forecasted to be down 62% from 2018 to 2019, according to a presentation by Yao Yao, market research manager for Nutrien, who gave the nitrogen outlook.

"All of these have an impact on trade and we see it specifically with the urea exports with Iran," Prud'homme said.

USMCA GOOD FOR FARMERS, RETAILERS

Because of these various global policy issues, both TFI and Fertilizer Canada are pushing for the passage of USMCA.

"Mexico and Canada are two of the United States' biggest trading partners and together import 60% of U.S. agricultural goods," Lara Moody, vice president of stewardship and sustainability at TFI, said.

"Our nation's growers depend on free and fair access to markets to be able to compete on the global stage. The USMCA will ensure that markets with our strongest trading partners remain open and fair."

"Canada's fertilizer industry has benefitted from the stability and certainty of trade agreements," said Garth Whyte, president and CEO of Fertilizer Canada. "Access to the U.S. and Mexico markets have contributed to growth and modernization of Canadian fertilizer production."

"Conversely, Canadian agri-retailers and farmers have benefited from access to quality United States fertilizer products. Continued access to free and fair markets will ensure a strong agricultural industry in North America."

The fertilizer industry faces strong competition for investment globally and the USMCA is an essential component in maintaining favorable economic conditions and contributing to the industry's continued success in the years to come, the release said.

Russ Quinn can be reached at russ.quinn@dtn.com

Follow him on Twitter @RussQuinnDTN

(CZ/ES)

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