Agricultural cooperative CHS Inc. and fertilizer maker OCP North America are proposing a $450 million phosphate fertilizer plant in Louisiana to bolster domestic supplies at a time when global conflicts are increasingly hampering the flow of foreign crop nutrients.
The proposed plant in Wagaman, Louisiana, the first of its kind in the U.S. in more than four decades, would produce more than one million tons of phosphate fertilizer annually, according to a news release Wednesday. According to Bloomberg Green Market, U.S. finished phosphate fertilizer production will be approximately 5 million tons in 2024.
The news comes as the global fertilizer market is affected by geopolitical conflicts, first in Russia and Ukraine, and then in the Middle East. The trade disruption has led to higher prices for key crop nutrients and raised concerns about food security in the United States. The facility could reduce U.S. dependence on imported phosphate fertilizer by more than 48 percent, according to the release.
“We need to applaud loudly for this. This is a really big deal,” Agriculture Secretary Brooke Rollins said of the plant at an event in Louisiana on Wednesday.
The facility will provide “real competition for American farmers’ incomes as new entrants compete for their business,” Agriculture Undersecretary Stephen Vaden said at the event. The U.S. Department of Agriculture expressed concern about the consolidation of U.S. fertilizer production and the impact of rising prices on farmers, prompting Antitrust review industry.
The plant also gives Morocco’s OCP Group greater exposure to the U.S. market. Mosaic, the largest U.S. phosphate producer, supports tariffs on Moroccan fertilizers, saying the fertilizers are being sold to the U.S. at below-market prices. These levies have been in place for about five years, pause The White House made the proposal in June as the administration seeks to aid the farm economy.
OCP will supply phosphoric acid to the plant, the statement said. Morocco has the world’s largest reserves of phosphate rock. Fertilizer products will be distributed through OCP’s North American subsidiaries and CHS. Construction is expected to take up to two years, pending project-related and funding approvals.
Diammonium phosphate prices in New Orleans reached their highest in about a year in early August, according to Bloomberg Green Market data as of Friday, although prices have since eased.
Photo: A worker operates a front-end loader to transport phosphate fertilizer granules in a storage warehouse at a fertilizer plant in Cherepovets, Russia. Source:/Bloomberg
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