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The BASF plant in Freeport began producing ammonia in 2018 under a joint operating deal with Norweigian fertilizer giant Yara.<\/p>\n
BASF SE \/ Detlef W. Schmalow\/BASF SE<\/p>\n
Fertilizer plants along the Texas Gulf Coast are at the center of a federal inquiry into allegations of market manipulation, as recent price spikes have left farmers struggling <\/a>to afford the chemicals needed to grow their crops.\u00a0<\/p>\n The U.S. Department of Justice has requested information from fertilizer companies, as prosecutors investigate whether a series of corporate mergers in recent decades has turned the industry into an illegal monopoly that is gouging farmers. <\/p>\n At the same time, the U.S. Senate is weighing a series of bills that would require companies across the fertilizer supply chain to release their sales data to regulators, to try and chart where profits are being made. Similar legislation is under consideration<\/a> in the U.S. House, and President Donald Trump has even taken notice, writing on social media last month<\/a>, “the United States will not accept PRICE GOUGING from the fertilizer monopoly.”<\/p>\n Article continues below this ad<\/p>\n READ MORE: Trump admin’s cuts to housing programs in Texas, other states meet pushback in Congress<\/a><\/p>\n “I think there’s structural things that need to be addressed,” Senate Majority Leader John Thune said at a recent hearing on fertilizer prices in the Senate<\/a>. “There’s a small number of manufacturers who have the lion’s share of fertilizer production.”<\/p>\n The industry has rejected the allegations, saying market forces are at play.\u00a0<\/p>\n After the Russian invasion of Ukraine in 2021 disrupted major supply chains, the price of fertilizer spiked<\/a> to over $1,600 a ton and never came back down to where it had been before the start of the conflict. When the U.S. launched an attack on Iran in late February, clogging supply lines through the Strait of Hormuz, fertilizer prices shot up again, more than 25% in some cases.<\/a><\/p>\n Article continues below this ad<\/p>\n That is expected to generate large profits for the Gulf Coast’s fertilizer industry, which has grown rapidly over the past decade<\/a> as companies tap into the state’s abundant supplies of cheap natural gas to produce nitrogen-rich ammonia and other chemicals used to grow crops. Companies like\u00a0Nutrien and Yara, which operate plants in Texas, have seen their stock prices climb sharply.<\/p>\n However, the costs have been devastating to Texas farmers, who are having to spend more and more to plant crops they might not be able to sell at a high enough price to cover their costs. Fertilizer typically represents around a third of a farm’s expenses, said Russell Boening, the president of the Texas Farm Bureau who owns a farm\u00a0outside San Antonio.\u00a0<\/p>\n “We already had some serious price increases over the years, and now what’s happened in the last two or three months has definitely added fuel to the fire,” he said. “Folks have talked about just quite frankly, using less fertilizer, but you’ve got to be careful there because what is that going to do to your production. It’s a risk.”<\/p>\n