The Fertilizer Emergency: What Trump's Phosphate Declaration Means for U.S. Crops

Agriculture

Jul 5

Written By Don Bradford

The Fertilizer Emergency: What Trump's Phosphate Declaration Means for U.S. Crops - and for San Joaquin County

Overview

On June 29, 2026, Trump declared a national emergency over U.S. fertilizer supplies and suspended countervailing duties on Moroccan phosphate fertilizer for up to eight months.
The move follows five months of disruption. The February 2026 Iran war closed the Strait of Hormuz, which normally carries about a third of the world's traded fertilizer and half its sulfur.
USDA projects the suspension will cut phosphate prices 22% and save farmers $1.82 billion a year. Independent analysts and the domestic producer, Mosaic, dispute how fast that relief actually shows up.
San Joaquin County is not a Midwest row-crop county. Milk, almonds, and grapes are its top commodities, not corn and soybeans, so the direct financial effect here is different, and mostly indirect.

How we got here

The United States and Israel launched airstrikes against Iran on February 28, 2026. Iran closed the Strait of Hormuz in response. The strait is a narrow chokepoint between Iran and Oman that, before the war, carried about a quarter of the world's seaborne crude oil, a fifth of its liquefied natural gas, and roughly a third of globally traded fertilizer, along with half the world's traded sulfur. Morocco needs that sulfur to process phosphate rock into usable fertilizer.

A ceasefire and reopening agreement followed in mid-June, but the recovery has been slow. Commercial vessel transits through the strait still run at roughly a third of pre-war levels this week, and war-risk insurance for tankers still prices at eight times normal rates. Fertilizer shipments lag even oil, because carriers and insurers have moved more cautiously on lower-value, less time-sensitive cargo.

A separate, older dispute sits underneath the war shock. In 2021, following a petition from Mosaic — the dominant U.S. phosphate producer, controlling roughly 80% of the domestic market — the U.S. imposed countervailing duties on phosphate fertilizer from Morocco and Russia, arguing their governments unfairly subsidized production. Morocco holds nearly 70% of the world's known phosphate reserves and was historically the largest foreign supplier to U.S. farmers before the duties cut those imports to near zero. A Texas A&M study put the cost of those duties to American farmers at $6.9 billion between the 2021 and 2025 growing seasons.

That dispute had already started unwinding before the June proclamation. In December 2025, the U.S. Court of International Trade sided with Morocco's state phosphate producer, OCP, finding that a Moroccan tax program Commerce had cited as an unfair subsidy wasn't specific to OCP and therefore wasn't countervailable — cutting the duty rate to about 2.11%. On March 4, 2026, the U.S. government voluntarily dismissed its appeal, ending the five-year legal fight. The June 29 emergency declaration effectively finished what the courts had started, suspending the residual duty entirely rather than leaving it to wind back down through further review.

Countervailing Duty Rate on Moroccan Phosphate Fertilizer, 2021–2026

Source: U.S. Department of Commerce determinations and U.S. Court of International Trade rulings, as reported by Capital Press, DTN, and Morocco World News.

The June 2026 bar reflects a suspension, not a repeal. The underlying order stays on the books. Commerce has been running a five-year sunset review of the countervailing duty order since March 2026 and, earlier this month, extended its own deadline for a preliminary decision to July 20, 2026 — the next hard date that will determine whether the duties return once the eight-month suspension ends, or get wound down for good.

The administration's framing and actions taken

The White House invoked Section 318 of the Tariff Act of 1930, emergency authority normally used for humanitarian relief imports, to declare that threats to fertilizer supply constitute a national emergency. That framing lets Treasury and Commerce waive duties immediately instead of running the standard, slower trade-remedy review process.

The administration bundled the duty suspension into a wider package: a February 2026 Defense Production Act order protecting domestic elemental phosphorus production, Jones Act waivers, relaxed trucking Hours of Service rules, and a June 2026 executive order on agricultural innovation. Agriculture Secretary Brooke Rollins projected the phosphate move alone would cut prices about 22% and save farmers $1.82 billion a year across more than 100,000 farms and 97 million planted acres.

The proclamation frames the crisis as an external supply-chain disruption. It does not attribute the price spike to the administration's own military conflict with Iran, even though Senate testimony has tied the closure of Hormuz directly to the acceleration of fertilizer costs since February.

Congressional and industry response

The reaction inside the Republican coalition split more than a simple party-line story suggests. Farm-state GOP senators Grassley (R-IA), Marshall (R-KS), Ernst (R-IA), and Hyde-Smith (R-MS) had already introduced legislation in April to eliminate the duties permanently, arguing Trump's temporary fix doesn't go far enough. Grassley put the market structure bluntly: "Mosaic has 80% of the phosphate market. They don't need protections."

A May 12 Senate Agriculture Committee hearing captured the tension. Witnesses called the fertilizer cost spike a "generational event" for agriculture. Sen. Marshall told the Fertilizer Institute's CEO that "American farmers are price takers on both ends. That's not a market. It's a trap." A North Dakota State analysis cited at the hearing found administration tariffs added nearly $1 billion in input costs between February and October. Farm bankruptcies were up 46% year over year.

The numbers behind the pressure: DAP fertilizer priced at the NOLA Gulf terminal drifted to about $710 a tonne this spring, up from $647.50 a year earlier. USDA projects 2026 net farm income will slump to $153.5 billion against record sector debt of $624.7 billion. An American Farm Bureau Federation survey found roughly seven in ten farmers could not afford enough fertilizer for the current planting season.

Mosaic opposed the suspension. The company said it "supports strong enforcement of U.S. trade laws to ensure a level playing field for domestic producers," and said its own production is constrained by limited domestic sulfur supply — some of which is exported rather than used for fertilizer manufacturing at home.

Independent fertilizer analysts doubt the relief lands on schedule. StoneX's Josh Linville put the phosphate-to-corn price ratio near the all-time high set in 2008, and warned that without a real price cut, farmers may simply skip, reduce, or delay fall applications, with direct consequences for 2027 yields.

Early signals: the June 30 Acreage Report

USDA released its June Acreage Report one day after the emergency declaration, giving the first hard data on how farmers actually responded through spring planting. Corn acreage held essentially steady with March intentions. Soybean acreage came in even higher than expected, continuing a shift away from corn toward less fertilizer-intensive crops.

U.S. Corn and Soybean Planted Acreage, 2025 vs. 2026

Source: USDA NASS Acreage Report, June 30, 2026.

Corn acres fell about 3% year over year; soybean acres rose about 5%, extending a rotation shift that predates the fertilizer emergency but has been reinforced by it. Agricultural economists caution against reading too much into how steady 2026 planting looks. Most of that fertilizer was purchased or applied before the war escalated, which makes switching crops mid-cycle a sunk cost. The real test, as NCGA's chief economist put it, is what happens with fall 2026 applications for the 2027 crop — the exact purchasing window this proclamation was timed to influence.

Range of outcomes over the next 12 months

Scenario	What would have to happen	Likely effect on 2027 crops
Optimistic	Moroccan tonnage flows freely; Hormuz shipping normalizes further; DAP prices fall meaningfully before fall application season	Normal phosphate application rates; per-acre costs moderate from projected record highs; corn/soybean mix stabilizes
Base case	Partial relief; logistics lag the policy — a shipload of phosphate takes 90 to 120 days to reach the U.S. from Morocco, so even confirmed orders won't land before late fall	Regional affordability gaps persist — one national farm survey found about 70% of respondents couldn't afford all the fertilizer they needed; continued drift from corn toward soybeans and away from wheat
Downside	Moroccan supply doesn't materially increase, or the Hormuz ceasefire deteriorates	Farmers reduce, delay, or skip fall phosphate applications; direct 2027 yield risk; further acceleration of farm bankruptcies and consolidation

USDA Projected 2027 Per-Acre Production Costs by Crop

Source: USDA production cost projections, as reported by Brownfield Ag News, July 2026.

These are forecasts, not final figures. They will move with fertilizer and fuel prices over the coming months, and corn's projected $952-per-acre cost carries the most exposure to how the phosphate suspension actually plays out.

Why this matters, and doesn't, for San Joaquin County and Lodi

San Joaquin County is not in the direct line of fire the way Iowa or Kansas is, and the reason why is the more useful local story.

We are not a corn-and-soybean county

The phosphate emergency was written for the Corn Belt. Corn is the single largest U.S. consumer of phosphate fertilizer, followed by soybeans, and the policy's entire structure — the timing, the eight-month window, the framing around "fall application season" — runs on Midwest row-crop economics. San Joaquin County's agricultural economy looks nothing like that. The county's most recent Annual Crop Report puts milk, almonds, and grapes at the top by value — dairy and perennial tree and vine crops, not row crops.

San Joaquin County Top Agricultural Commodities by Value, 2024

Source: San Joaquin County Agricultural Commissioner, 91st Annual Crop Report (2024 data, released September 2025).

Total county gross agricultural production value ran about $3.14 billion across 3,439 farms and 891,000 acres. Corn does appear in that total, but almost entirely as silage for dairy cattle, not the commodity grain crop the federal emergency targets. Corn silage has ranked around the county's tenth-largest commodity in recent years, and the county's actual grain corn exports came to 1,847 tons in the most recent report — a rounding error next to the roughly 95 million acres of corn planted nationally this year.

Where the exposure actually runs

Local pathways worth tracking:

Dairy feed costs. San Joaquin County dairies run on corn silage and other feed inputs. The county has already lost dairies — 71 active operations in 2024, down from 86 in 2021 — as feed and production costs outpaced milk prices. National corn-price or fertilizer-cost volatility feeds that same squeeze, even though local dairies aren't buying phosphate-heavy row-crop inputs directly.
Perennial crop fertilizer costs. Almonds, grapes, and walnuts all require phosphate and other fertilizer inputs, applied on a different cycle than annual row crops. Elevated national phosphate prices reach local orchard and vineyard operators too, just without the "fall application season" urgency driving the federal timeline.
Diesel and fuel costs. The same Strait of Hormuz disruption driving the fertilizer emergency has already pushed farm diesel prices up sharply nationally. That affects field work, irrigation, and transport costs for every San Joaquin County grower, regardless of crop mix — a link LodiEye covered in its recent oil market indicators report.
Grocery price pass-through. Even where local growers aren't direct phosphate buyers, national fertilizer costs eventually show up in the price of corn-fed dairy and meat products, and in the broader food basket LodiEye tracks for Lodi households.

The local takeaway

The federal phosphate emergency is a real and significant policy action aimed at a problem San Joaquin County mostly doesn't have in the form it exists in Iowa or Kansas. Local exposure runs indirect and diffuse — through dairy economics, orchard and vineyard input costs, diesel prices, and general food inflation — rather than through phosphate purchases for corn and soybean row crops. Growers here should watch national DAP and MAP price trends and diesel costs as the more relevant local indicators. The Moroccan duty suspension itself is unlikely to move much for a Lodi-area farm operation.

About This Report

LodiEye is the original civic-reporting and analysis arm of Lodi411.com, a citizen-run civic data and transparency platform serving Lodi, California and San Joaquin County. LodiEye gathers information of public interest, applies editorial judgment to public records, meetings, and data, and publishes original explanatory reporting for its readers — the work of a newsroom, and a representative of the news media as that term is defined under federal law. Our reporting emphasizes primary sources, public data, and full source transparency so readers can check every claim. LodiEye complements, and does not replace, the other outlets covering this region; for additional reporting on Lodi, San Joaquin County, and the broader region, we also encourage readers to consult the Lodi News-Sentinel, Stocktonia, The Sacramento Bee, CalMatters, and other established news organizations. Our full editorial standards and news-media-status statement is published at lodi411.com/editorial-standards.

This LodiEye analysis was produced using artificial intelligence tools under the direction and review of the founder. Lodi411 uses multiple AI platforms in its research and publication workflow, including Anthropic's Claude (primarily Opus and Sonnet models) and Perplexity AI across a variety of large language models offered by each. For this report, Claude handled research, drafting, and data visualization; Perplexity's Model Council feature was used separately as an independent audit and fact-check pass before publication. These tools were used in the following capacities:

Source Discovery: Claude's web search tool identified primary sources including the White House proclamation and fact sheet, USDA and Senate Agriculture Committee materials, congressional press releases, trade and farm press (DTN, Pro Farmer, AgWeb, Capital Press, Farm Progress, Brownfield Ag News), the San Joaquin County Agricultural Commissioner's Annual Crop Reports, and independent tracking of Strait of Hormuz shipping conditions.

Credibility Validation: Claude cross-referenced claims across multiple independent sources during drafting, prioritizing primary government and legislative documents first, then trade-press reporting and congressional testimony, to verify key data points including USDA acreage figures and San Joaquin County crop-value figures. Perplexity's Model Council was then used as an independent, separate-platform audit of the completed draft before publication.

Analysis and Synthesis: Claude Opus and Sonnet assisted in reconstructing the emergency proclamation's legal basis and timeline, cross-referencing national policy against San Joaquin County's actual crop-value composition, and building a three-scenario framework for likely 2027 crop outcomes.

Presentation: Claude assisted in drafting, structuring, and formatting the report for clarity and readability, including the Kendo UI data visualizations, the scenario-outcomes table, and the local-impact section structure.

Final Review: Perplexity's Model Council reviewed the completed draft for factual consistency, source attribution accuracy, logical coherence, and balanced presentation, as an independent check separate from the Claude session that produced the draft. Throughout the process, the editor sets the report's goals, scope, and tone; creates and shapes draft content; reviews and edits the report; integrates independent fact checks; and reviews the AI cross-checks and validations. Cross-platform review by a separate model council, on top of source verification against primary documents, is the primary error-reduction mechanism here.

Lodi411/LodiEye believes that transparency about how our research is produced — including our use of AI under human direction — strengthens trust with readers and the broader information ecosystem. Readers who spot an error are encouraged to write editor@lodi411.com so we can correct it.

References

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Don Bradford