What Happened?

The United States is spending more than $1.5 billion to build new fertilizer factories at home, but a Congressional Research Service report on fertilizer transportation, published Sept. 4, found that the country may not be able to move that fertilizer once it's made. Aging infrastructure, insurance mandates, and a decades-old shipping law are squeezing the supply chain that gets fertilizer from factories to farms.

The report found that issues with rail service and domestic coastal shipping may limit the benefit of expanding domestic production, even if new plants come online on schedule.

Why Does it Matter to Me?

When it costs more to move it, or when supply gets stuck, farmers pay more to plant their crops, and those costs often end up in grocery prices.

The federal government has committed more than $1 billion in loan guarantees for potash mining in Michigan and $500 million in fiscal year 2026 grants for new fertilizer plant construction. The Secretary of Agriculture has stated a goal of moving all fertilizer production back to the United States. But the report warns the supply chain connecting those plants to farms could become the real bottleneck.

Both Sides, Now

Supporters of the reshoring push say bringing fertilizer production home reduces dependence on foreign suppliers and strengthens American agriculture. The administration backed that position with more than $1.5 billion in federal commitments.

Critics, or at least the constraints the report identifies, point to three specific problems:

  • Shipping: The Jones Act, a federal law requiring that cargo moving between two U.S. ports travel on U.S.-built, U.S.-crewed vessels, creates a hard limit. There are no U.S.-built dry bulk ships capable of moving phosphate rock domestically, and no U.S.-built stainless steel chemical tankers, even though many such vessels operate in the foreign fleet. At least one domestic phosphate manufacturer now imports phosphate rock from Peru rather than shipping from its own Florida mines because foreign ships are cheaper and more available.
  • Rail: Railroads raised insurance requirements for shippers of anhydrous ammonia, a toxic fertilizer and manufacturing input, from $10 million to $100 million in general liability coverage.
  • Trucks: The federal agency that oversees commercial trucking issued a 90-day waiver of driver hours-of-service rules on May 26 for trucks hauling fertilizer in certain states, offering some short-term relief.

The administration issued a five-month Jones Act waiver from March 18 to Aug. 17 to help move fertilizer disrupted by the Iran conflict. That waiver enabled at least 10 fertilizer-related domestic shipments on foreign-built vessels and was later extended to Nov. 14 for petroleum products, but not for fertilizer.

What Happens Next?

The Jones Act waiver for fertilizer has expired. For the supply chain problems to be resolved long-term, Congress or the administration would need to act on two fronts: the Jones Act shipping restrictions and rail insurance mandates. No legislation addressing any of those three issues is currently scheduled for a vote.

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