S.Hrg.119-307

1[Senate Hearing 119-307]2[From the U.S. Government Publishing Office]34                                                        S. Hrg. 119-30756                  PRESSURE COOKER: COMPETITION ISSUES7                 IN THE SEED AND FERTILIZER INDUSTRIES89=======================================================================1011                                HEARING1213                               before the1415                       COMMITTEE ON THE JUDICIARY16                          UNITED STATES SENATE1718                    ONE HUNDRED NINETEENTH CONGRESS1920                             FIRST SESSION2122                               __________2324                            OCTOBER 28, 202525                               __________2627                          Serial No. J-119-452829                               __________3031         Printed for the use of the Committee on the Judiciary3233                [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]3435                        www.judiciary.senate.gov36                            www.govinfo.gov3738                               ______3940                 U.S. GOVERNMENT PUBLISHING OFFICE414262-935                    WASHINGTON : 20264344                       COMMITTEE ON THE JUDICIARY4546                  CHARLES E. GRASSLEY, Iowa, Chairman4748LINDSEY O. GRAHAM, South Carolina    RICHARD J. DURBIN, Illinois,49JOHN CORNYN, Texas                       Ranking Member50MICHAEL S. LEE, Utah                 SHELDON WHITEHOUSE, Rhode Island51TED CRUZ, Texas                      AMY KLOBUCHAR, Minnesota52JOSH HAWLEY, Missouri                CHRISTOPHER A. COONS, Delaware53THOM TILLIS, North Carolina          RICHARD BLUMENTHAL, Connecticut54JOHN KENNEDY, Louisiana              MAZIE K. HIRONO, Hawaii55MARSHA BLACKBURN, Tennessee          CORY A. BOOKER, New Jersey56ERIC SCHMITT, Missouri               ALEX PADILLA, California57KATIE BOYD BRITT, Alabama            PETER WELCH, Vermont58ASHLEY MOODY, Florida                ADAM B. SCHIFF, California5960             Kolan Davis, Chief Counsel and Staff Director61         Joe Zogby, Democratic Chief Counsel and Staff Director6263                            C O N T E N T S6465                              ----------6667                           OPENING STATEMENTS6869                                                                   Page7071Grassley, Hon. Charles E.........................................     172Durbin, Hon. Richard J...........................................     373Lee, Hon. Michael S..............................................     474Booker, Hon. Cory A..............................................     67576                               WITNESSES7778Coppess, Noah....................................................     979    Prepared statement...........................................    3780    Responses to written questions...............................    8681Latham, John.....................................................    1182    Prepared statement...........................................    4183    Responses to written questions...............................    9184LaVigne, Andrew..................................................    1585    Prepared statement...........................................    4586    Responses to written questions...............................   10187Moss, Diana......................................................    1788    Prepared statement...........................................    4989    Responses to written questions...............................   10790Ragland, Caleb...................................................    1291    Prepared statement...........................................    5892    Responses to written questions...............................   11193Rosenbusch, Corey................................................    1394    Prepared statement...........................................    6895    Responses to written questions...............................   1179697                                APPENDIX9899Items submitted for the record...................................   123100101                  PRESSURE COOKER: COMPETITION ISSUES102                 IN THE SEED AND FERTILIZER INDUSTRIES103104                              ----------105106                       TUESDAY, OCTOBER 28, 2025107108                              United States Senate,109                                Committee on the Judiciary,110                                                    Washington, DC.111    The Committee met, pursuant to notice, at 10:17 a.m., in112Room SH-106, Hart Senate Office Building, Hon. Charles E.113Grassley, Chairman of the Committee, presiding.114    Present: Senators Grassley [presiding], Cornyn, Lee,115Hawley, Britt, Moody, Durbin, Klobuchar, Blumenthal, Booker,116and Welch.117118        OPENING STATEMENT OF HON. CHARLES E. GRASSLEY,119             A U.S. SENATOR FROM THE STATE OF IOWA120121    Chairman Grassley. This is kind of the order of business122for today. I'll have an opening statement, Senator Durbin will123have an opening statement, then we have the Chairman and124Ranking Member of the Subcommittees to make an opening125statement--that's the Antitrust Subcommittee--and then we'll126introduce and swear in the witnesses and take the testimony.127    Today, the Judiciary Committee turns its attention to the128problem Iowa farmers talked to me about at the kitchen table129and at the local co-op. This time of the year, farmers are130buying the basics they need to plant and harvest a crop. These131farmers don't feel like they have a real choice, let alone a132fair price. America's farmers are the most productive in the133world. They take the risk, put in the work, and feed the United134States and much of the world, but they also operate on thin135profit margins, if they have a profit. If input costs go up or136switching suppliers is too hard, that pinch is felt by every137farmer, family, and consumer in the world.138    Farmers across the country are shouldering significant139higher input costs, particularly for seed and fertilizer.140According to the USDA's agricultural price reports, the price141indexes farmers pay for these categories were notably higher in142January 2025 than at the start of 2021. This was obviously due143in part to the record high inflation that took place during the144last 4 years. Rising input prices squeeze already thin margins,145especially when combined with volatile commodity markets,146higher borrowing costs, and weather risk. Today's hearing will147examine the drivers behind these trends: energy markets that148influence nitrogen production, global supply disruptions,149logistic bottlenecks, and market concentration. This hearing150will evaluate practical steps that increase transparency and151competition so processors and producers can remain viable and152resilient. One such step would be to pass my legislation, the153Fertilizer Research Act. The bill would require Department of154Agriculture to do a comprehensive study on fertilizer industry155to shed light on the reason farmers are paying so much for156fertilizer. The Department would be required to give157recommendations and do regular reporting to the public.158    This hearing is focused on competition issues. However,159there is something that the Trump administration can do right160now to help ease the burden for farmers: lowering the161countervailing duties on phosphate from Morocco. In 2024, the162Biden administration increased the duties on Moroccan phosphate163to 18 percent. The Biden phosphate duties have only hurt164farmers by boxing out access to this important market on an165essential input with no substitute. I'm calling on the Trump166administration to help American farmers and get rid of that167phosphate duty.168    Over the last 20 years, a few big companies have bought up169many of the smaller seed and chemical businesses. Those same170companies now sell not just the seeds, but also the pesticides171and digital farming tools that tell farmers what to plant and172when. Because all these products and data systems are tied173together, it's hard for farmers to switch to a different brand.174Their data and recommendations are locked in to one company's175system. On the fertilizer side, global energy and trade shocks176hit prices fast. Regional markets, those prices can be slow to177fall. On top of that are the contracts and dealer practices,178like loyalty rebates, most-favored clauses, and early order179calendars, that can lock in a farm or a local retailer even180when there's better options on paper.181    Now, nobody here wants to punish innovation. We want better182yields, healthier soils, quality products, and we've been183vastly improving in that area for the last 40 years, but we184also want competition that's fair, transparent, and local185competition that a farmer can actually express when he or she186sits down to make a purchase. Competition law is about making187sure the rules don't give a few players the power to decide188what everyone else pays and which choices are even available.189    This hearing focuses on problems and workable solutions.190First, transparency: farmers deserve to know the effective191price that they're paying, including how rebates and clawbacks192really work, and whether wholesale fertilizer declines are193being passed through in a timely way. Second, portability:194farmers ought to control their own data and move it quickly,195completely, and affordably so they can seek independent196agronomic advice without fear of losing their history. Third,197fair dealing: contracts and dealer programs shouldn't operate198as a de facto exclusive arrangement in rural counties where199there might only be one or two full-service outlets. And200fourth, accountability: when mergers don't deliver what was201promised on paper, agencies should look back and fix it. I202represent Iowa, so I'm thinking about anhydrous ammonia203logistics, early season timing, and the reality that a lost204multiline dealer can mean a long drive and fewer options. But205these issues cross State lines, and the principles are the same206whether you farm in Iowa, Illinois, or anywhere else. More207sunlight, more choice, less fine print, level playing fields.208    I appreciate Senator Durbin's partnership in setting this209constructive, bipartisan tone today. We'll hear from farmers,210producers, and industry experts. My goal is pretty simple:211identify practical steps, legislative and regulatory, that212respect innovation and property rights, but restore real, on-213the-ground competition. We're also joined today by Gail Slater,214the assistant attorney general for antitrust at the Department215of Justice. Her presence is a strong showing of good faith and216continued collaboration on ag antitrust issues that I hope to217have with her and have had already. When farmers win fair218choices at fair prices, the rural communities win, consumers219win and American food security wins. I look forward to the220discussion and now turn to Senator Durbin.221222         OPENING STATEMENT OF HON. RICHARD J. DURBIN,223            A U.S. SENATOR FROM THE STATE OFILLINOIS224225    Senator Durbin. Thanks, Senator Grassley. We are of226different political faith, but we are friends and we have many227issues in common, particularly as they relate to agriculture. I228concede--reluctantly, but concede--that Iowa is the number one229producer of corn among States----230    [Laughter.]231    Senator Durbin [continuing]. And add quickly, Illinois is232first in soybeans. We have one category where I think we are233comfortably ahead of Iowa and I want it noted this week, and234that's in the area of pumpkins, so we are proud of that fact. I235thank you for this hearing.236    I think we need to take a look at the overall state of the237farm economy as we address this particular challenge today.238More than 50 years ago, in 1973, the U.S. economy was in239turmoil. Inflation and the cost of living were up, food prices240were high, and American families were angry. At the same time,241there was a global shortage of livestock feed, causing the242price of soybeans to spike. President Nixon, in an effort to243stem inflation, stopped all U.S. soybean exports, including244those headed to Japan, then our biggest customer. This245interruption lasted about 3 months, but for Japan, it was the246last straw. The Japanese wanted a more reliable soybean247supplier, so they found a handful of small soybean farms in248Brazil and started investing. Today, Brazil is the second249largest soybean producer in the world and the biggest250competitor to Illinois soybean farmers. All it took was one251Presidential misstep and 3 months of trade uncertainty. Three252months.253    Sadly, President Trump is not a student of history. His254tariffs on China, even as they change from one week to the255next, are bad news for Illinois farmers and good news for256Brazilian farmers, who've seen their sales of soybeans to China257increase by $2 billion this year. Tariffs are also good news258for Argentina, which has sold $708 million more in soybeans to259China this year, yet President Trump is propping up Argentina's260government with a $40 billion lifeline when American farmers261are struggling to stay in business. The President is in Asia262for trade discussions with China. I hope that they will be263positive, but China is now investing heavily in South American264farming, even building mega ports there to manage massive265shipments of soybeans, corn, and sugar. It is a replay of what266we saw with Japan and Brazil in the 1970's, and China is267playing the long game at the expense of American farmers.268    Illinois farmers are concerned about the increasing cost of269doing business, especially the cost of seed, fertilizer, and270equipment. One problem is that there are just three--pardon271me--just a few big companies in these sectors where market272concentration reduces competition. The Committee has examined273these dynamics in other parts of the food industry, such as274meat packing and groceries. It's a complex issue, which is why275I joined Chairman Grassley back in April to question why the276Department of Justice plan to close its Chicago field office277that specializes in agriculture antitrust issues. The278administration has not provided a response.279    Farmers need policy certainty from Washington, but these280past 10 months, that's not what we've given them. The Chairman281and I co-sponsored a bill to allow for year-round E15 ethanol282sales. It almost passed Congress until Donald Trump and Elon283Musk stopped it and opposed the bill. Farmers also face severe284workforce shortages. Seventy percent of farm workers in the285United States are foreign born, but the way this administration286targeted immigrant farm workers is another sign of how this287administration values farmers. USDA has forced out more than28815,000 employees since January, and farmers are seeing289widespread delay in services as a result.290    My farmers--all farmers--need help, but no amount of291financial relief can replace lost markets, especially if relief292payments simply go from farmers straight to the handful of293seed, fertilizer, and equipment companies. Big companies say294their size helps them compete and survive while providing295consumers with a consistent, reliable product. Farmers296disagree, saying feed, seed, and fertilizer are not affordable,297come with strict contracts and requirements that prevent298farmers from exploring the alternatives, pressure tactics that299keep farmers trapped as customers, and zero transparency on how300personal farming data gets collected and sent to who knows301where for who knows what.302    This month, the Nobel Prize for Economics was awarded to303three economists who believe that economic growth happens when304conditions exist that allow new innovation and technology to305rise up to replace old ones. Today's witnesses will report on306whether that is actually happening. Thank you, Mr. Chairman.307    Senator Grassley. Chairman Grassley. Before I call on308Senator Lee, Chairman of the Subcommittee, and Senator Booker,309the Ranking Member, I think we all saw the TV reports over the310weekend that Secretary Bessent feels that he's making progress311with the Chinese counterparts, and I suppose, to some extent,312that comes from the fact that the President has used tariffs as313a carrot and stick to make progress in this area, but we hope314that when President Trump gets done with his meeting with315President Xi this weekend that we have good reports on soybeans316going to China. Senator Lee.317318           OPENING STATEMENT OF HON. MICHAEL S. LEE,319             A U.S. SENATOR FROM THE STATE OF UTAH320321    Senator Lee. Thank you, Chairman Grassley and Ranking322Member Durbin, for holding this important hearing on323competition in American agriculture.324    Agriculture is, of course, one of our greatest strengths as325a country. Our farmers work hard to produce nutritious food,326not just for families here at home, but to feed hungry people327around the world. And yet today, farmers are facing mounting328pressure from market consolidation that's been squeezing them329from both sides, creating a bottleneck. The companies that330farmers buy from keep raising prices on some of the essential331supplies they have to have in order to produce their332commodities. At the same time, buyers that farmers try to sell333to continue to negotiate down, and they're negotiating down334what they'll pay for crops and for livestock. Farmers are335caught in the middle, very often watching their margins shrink336year after year.337    Market consolidation has, of course, raised some additional338concerns. Just two companies now control about 90 percent of339corn seed genetics. Four firms produce roughly 75 percent of340the nitrogen fertilizer used in this country. In cattle, four341meat packers handle about 85 percent of fed cattle slaughter342capacity in America. Consolidation's impacts are felt not just343on the farm, but all the way to the grocery store where344consumers face fewer choices and, fairly consistently, higher345prices at the same time. In addition to consolidation,346sometimes regulations add to the problem, even when this is347unintended as it sometimes is. Federal regulations often impose348compliance costs that small operators simply can't shoulder.349What often may start as safety measures can become barriers350that keep new competitors out of the market altogether. They351serve as a sort of moat an anticompetitive moat around the352industry, and they can exclude people from becoming competitors353who might otherwise reach that status.354    Now, this is why I've been an original co-sponsor of the355Processing Revival and Intrastate Meat Market Exemption Act,356also known as the PRIME Act. This bill takes a commonsense357approach. It would let States set their own inspection358standards for meat that's processed and sold entirely within a359single State's boundaries. The Constitution, properly360understood and understood based on its text and based on its361original public meaning at the time of its adoption, simply362does not support the proposition that Federal regulatory363authority should extend to commerce as to products that never364cross State lines to begin with. By removing this onerous365Federal regulatory footprint and allowing States to play their366role where it's appropriate for States to play, we could help367small processors compete far more effectively. More processors368would mean farmers would have more options as to where they369could sell their products, which would strengthen local370economies and build resilient food systems.371    We also need strong enforcement efforts to address some of372our competition issues. President Trump's Agricultural373Competition Task Force is a joint effort between the U.S.374Department of Justice Antitrust Division and the U.S.375Department of Agriculture. It's an effort that brings together376DOJ's enforcement authority and USDA's deep knowledge of377agricultural markets. It's a comprehensive approach designed to378root out anticompetitive behavior.379    The Task Force is tackling these problems head on. DOJ is380investigating price-fixing schemes and allegations of381collusion. They're taking a fresh look at past mergers to see382how they may have impacted the state of competition. They're383examining whether dominant firms are sharing information in384ways that let them illegally coordinate their actions. The Task385Force is also going after predatory pricing where dominant386corporations deliberately sell at prices below cost to drive387smaller rivals out of business so that they can then seize a388dominant position and, of course, addressing patent abuses that389stifle innovation and keep new competitors locked out.390    The Task Force also recognizes that we need to address the391structural problems that created these issues in the first392place. Take the cost squeeze farmers face every planting393season. When essential inputs, such as seed and fertilizer,394become more expensive, farmers' profit margins inevitably395shrink. These costs stay high because of limited competition,396and when farmers face these market conditions, we're not just397looking at an agricultural problem, we're looking at a broader398threat that reaches across the economy and into our Nation's399food security, something that we pay a lot of attention to in400this town.401    Competitive markets are essential infrastructure, you might402say, within our economy. When competition works, innovation403flourishes because new ideas can break through because they404have every incentive to do so. Consumers benefit from better405products at fairer prices, rural communities prosper because406farmers can earn a decent living, but when competition breaks407down, we tend to see the opposite of that. Costs climb while408innovation stalls. Farmers and ranchers look at those shrinking409markets and wonder if the next generation will have any future410in farming at all, and we can't let that happen.411    Agricultural markets are not exempt from the rule of law,412certainly not exempt from our antitrust statutes. Farmers,413ranchers, and American consumers deserve markets where success414comes from innovation, efficiency, and hard work, not from415consolidation or collusion. I look forward to hearing from our416witnesses today and doing all this with an eye toward keeping417American agriculture strong for generations to come. In order418to do that, we all understand that we need robust competition.419Thank you, Mr. Chairman.420    Chairman Grassley [off mic]. Now to the distinguished421Ranking Member of the Subcommittee on Antitrust, Competition422Policy, and Consumer Rights, Senator Booker.423424           OPENING STATEMENT OF HON. CORY A. BOOKER,425          A U.S. SENATOR FROM THE STATE OF NEW JERSEY426427    Senator Booker. Mr. Chairman, I'm grateful for you and the428Ranking Member for organizing what I think is a vitally429important hearing. I want to thank Senator Mike Lee. He and I430have a whole bunch of overlap, a wide swath of agreement of the431urgency of these issues, and a lot of common ideas about what432we need to do about them.433    I want to just start by saying something that doesn't434really need to be said because it's happening all over this435country, but American farmers are in crisis. Farms in New436Jersey and across our country are facing unprecedented437conditions, and we're seeing a loss of American family farmers438in a way that could be described as an extinction-level event.439These are incredible Americans who scratch from the soil the440food that feeds our families and makes us competitive globally,441but year after year, they have seen the cost of seed,442fertilizer, fuel, and land go up while the prices for their443crops barely budge. And we're going to hear testimony today444about the serious financial challenges facing our soybean445farmers really created by the Trump administration's chaotic446trade policies, and I want folks to hear that because, again,447I've gone across this country in multiple States and met with448soybean farmers and seen their true fealty to this Nation and449their mission.450    But while soybean farmers are struggling, unnecessarily so,451we need to also remember that many other farmers, including452farmers growing fruits and vegetables, are also struggling and453in need of assistance from Congress. They need action from this454body. They need not us to only rightfully point out the455problems, but come up with solutions because our food system456today suffers from, as my colleague, Mike Lee, was saying,457hyper concentration. A handful of mega corporations now458dominate every step of the supply chain, and that begins with459seeds. The seed March market, which used to include hundreds of460small, regionally based seed companies, is now controlled by461just a few powerful global corporations: Bayer, Corteva,462Syngenta. Through mergers and acquisitions and aggressive463patent practices, these firms have driven out nearly all the464smaller competitors. As a result, these three companies can465dictate what seeds are available, what traits they carry, and,466ultimately, what crops farmers grow.467    Seeds aren't just another input. They are unique because468they are living organisms, the foundation of our food system,469which used to be controlled and dictated by great Americans--470individual farmers who know their soil, who are stewards of the471land--but you have to have good seeds to grow, and they know472that. For thousands of years, these stewards of our lands,473these great Americans, saved seeds from one harvest to the next474and fed America, but in recent decades, this fundamental right475of farmers to save seeds has literally been stolen from them by476corporate greed. Monsanto, now Bayer, locked up seeds with477sweeping utility patents and sued our American farmers for478doing what they had always done. Saving and replanting the479progeny of seeds that they planted, that their parents planted,480that their grandparents planted. Since the 1990's, companies481have engineered genetically modified seeds with desirable482traits, like herbicide tolerance or insect resistance. These483patented seeds are bundled with their own pesticides by484corporations so farmers are forced to buy the whole package.485This traps farmers in an expensive system they may not want or486even need.487    Last November, I sent a letter to the EPA urging them to488deny the pending re-approval for the pesticide, dicamba.489Dicamba is notorious for drifting and damaging neighboring490farms with crops that aren't engineered to withstand it. This491creates an inescapable lose-lose for our American farmers,492either by dicamba-resistant seeds or risk your crops being493destroyed by pesticide drift. It forces farmers into seed494pesticide bundles and expands corporate control. That's not495real choice. That's not a free market. It's coercion through496chemistry.497    Choice is disappearing across our farm economy. It is anti-498free market, and our public research institutions, who have the499tools to innovate, are steered to serve Bayer and Corteva's500interests. These corporations not only control research501funding, but distribution, blocking independent seeds from502reaching the market. The result: fewer varieties, weaker503resilience, and lost opportunities to adapt to a rapidly504changing climate. This is corporate capture of the very first505link in our food chain, and when you control the seed, you have506unjust control over farmers, and, ultimately, you control the507food.508    We are America, the home of the brave and the land of the509free, but freedom is being stolen by this corporate510concentration, and it's not just farmers that are hurting511because of this broken, corrupt system. Consumers also pay the512price. We must do better. We must restore competition and513fairness in this system because I know American farmers. Give514them a fair playing field and they can compete, and they can515compete with the world, and when our farmers compete, all of516America wins. So, this means enforcing our antitrust laws and517placing a moratorium on any new Big Ag mergers. It means518protecting farmers' rights to save seeds and choose inputs519based on need. It means continuing the ban on dicamba and520investing in public research that serves the public interest,521public research that serves farmers and not corporations. This522is a moment of urgency. If we do not act now, we will reach a523point where so many farmers are driven off the land that they524have been on for generation after generation, land their525grandfathers and great grandfathers and mothers cleared with526their own bare hands. What's happening in America is dire.527Congress must not just talk about the problems. We've got to528fix them, or American farming as we know it will be forever529changed.530    I look forward to hearing from the witnesses. Thank you,531Chairman.532    Chairman Grassley. Thank you, Senator Booker. Now I'll533introduce the witnesses.534    Noah Coppess is an Iowa farmer. He co-owns Coppess Family535Farms, Cedar County. He also co-owns Lincoln Way Ag Services, a536grain-hauling custom pesticide application business. He holds537an associate degree in applied sciences and agricultural538mechanization from Kirkwood College. We also have John Latham,539another fellow Iowan. Mr. Latham is president of Latham Hi-Tech540Seeds, a company his grandparents founded in 1947. To this day,541Latham Seed offers corn, soybean, alfalfa cover crop products.542Mr. Latham holds a Bachelor of Science degree in agriculture543business from Iowa State University.544    Mr. Caleb Ragland is president of the American Soybean545Association. He leads also the Kentucky Livestock Coalition.546Caleb and his wife co-own Magnolia Green and Stock Farm where547they raise soybeans, corn, and winter wheat. Mr. Ragland holds548a bachelor's degree in business management and economic finance549from Bryan College. Mr. Corey Rosenbusch, president and CEO of550The Fertilizer Institute. Mr. Rosenbusch previously led the551Global Cold Chain Alliance and worked in Indonesia on the USDA-552sponsored Agricultural Development Initiative through the553Borlaug Institute. Mr. Rosenbusch holds a degree in554international development from Harvard and a Bachelor of555Science degree in agricultural education from Texas A&M.556    Lastly, or not lastly. Andy LaVigne is president and CEO of557the American Seed Trade Association, which represents companies558involved in plant breeding, seed production, distribution, and559related industries. Mr. LaVigne holds a Bachelor of Arts degree560in political science with a minor in economics from the561University of Florida. Last, we're joined by Dr. Diana Moss,562who serves as vice president and director of competition policy563at the Progressive Policy Institute. Her work includes studying564antitrust enforcement and sector regulation, including565agriculture. She previously served and led the American566Antitrust Institute and served at the Federal Energy Regulatory567Commission. She has a master's degree from the University of568Denver and a Ph.D. from Colorado School of Mines.569    I thank you all for appearing. Now I would ask you stand,570and I will swear you in.571    [Witnesses are sworn in.]572    Chairman Grassley. They all answered affirmatively. Mr.573Coppess, will you start out with your testimony please, and574then we'll go to Latham and down the table that way. Proceed.575576                  STATEMENT OF NOAH COPPESS,577           FARMER, COPPESS FAMILY FARMS, STANWOOD, IA578579    Mr. Coppess. All right. Hey, everybody. My name is Noah580Coppess. I'm a fifth-generation farmer from Cedar County, Iowa.581My wife, Jess, and I farm full time and run an agriculture582business while raising our two teenage kids, Tucker and Ellie,583on the farm. We grow commercial corn, seed corn, soybeans, and584have a small cow herd. Today, I'm here to represent my farm, my585customers, my county, and my fellow members of the Iowa Farm586Bureau. I've been involved in my family's row crop farm for my587entire life. After college, I spent 12 years working in the588local farm equipment dealership before I left to work on our589farm full time. After getting our ag service business590established, we have grown into the fertilizer and pesticide591sales market and can discuss the challenges we have had and the592pressures we see on our row crop farm.593    The reality in farming today is we're price takers rather594than price makers. That's especially true when consolidation595limits our options. It's further complicated by lack of price596transparency. With farmers forced to operate at the liberty of597the market at the front and back end, I have concerns with our598input and equipment supply chains and their ability to599manipulate our costs. I recognize that consolidation can offer600benefits, including cost efficiencies and technological601adoption, which are critical for meeting our global food602demand. However, if the market becomes too constricted, it is603ultimately the farmer who loses.604    Fertilizer pricing has become very volatile with, at times,605wild swings and costs varying as much as 25 to 50 percent from606year to year. We are asked to prepay for fertilizer 3 to 6607months prior to it being applied to the soil and up to 14608months before the crop will be harvested. Many of the contracts609are written with a narrow window to get the products applied,610or the contract expires and the input is repriced at a higher611value or monthly fees can be applied to extend the contract.612Phosphate fertilizer has become a bare-minimum usage fertilizer613on our farm due to the cost. We have invested significant614capital and time trying to find other ways to manage our615phosphorus needs as the cost of this input is at a point of616negative return.617    Following a profitable 2022, farmers lost nearly a quarter618of their income in just 2 years due to slumping commodity619prices and record high input costs. That pain was felt on our620farm, and we're feeling it today. In our ag business, we are a621startup. We struggle with the supply chain's willingness to622sell us product due to our low volume and competition with623their bigger customers. In our area, there are several retail624locations to buy fertilizer from. However, there are very few625wholesale options. Regardless of who I work with, we will be626competing with bigger customers, therefore, struggle to get627access.628    We use John Deere Operations Center to provide connectivity629between our equipment, record data in our fields, and implement630strategic placement of seed, fertilizer, and pesticides. John631Deere's user agreement mandates they have access to all of the632data we record from our equipment and the right to do as they633please with it. We utilize a tool called See & Spray to634minimize the application of certain herbicides to the weeds the635sprayer can see from a highly advanced camera and processing636system. This has reduced the use of pesticides by 50 to 80637percent. This machine comes with a tech fee charged per acre,638not applied, so we are paying a usage fee on 50 to 80 percent639of the fields that we don't even use the product for. We also640have to pay a significant fee to purchase the upgrade on the641machine at the beginning. There are other platforms where642equipment manufacturers have gone to per-acre usage fees that643we don't use on our farm. We are under heavy pressure to find644safer and environmentally friendly ways to produce our645products. How is it that we need to pay for the equipment up646front and then pay a usage fee in addition to achieve these647goals?648    We struggle in the seed industry with genetic options. If649we want a traited seed for pesticide or disease defense, we can650be at the mercy of what one company has bought from another. In651effect, we are often getting, genetically, the same or similar652hybrid from multiple companies in a different bag. This653situation is prevalent in the soybean side within list traits654being slow to the marketplace and in rootworm protection with655corn. We lack options. The consolidation of the companies has656narrowed up the development of new genetics. On our farm, we657raise non-GMO and specialty crops when the opportunity aligns658with our resources. We're struggling with advancements in seed659genetics to support those areas. With only a couple companies660owning the majority of the seed production, we're at the mercy661of what they choose to focus on. We've been planting the same662soybean variety for 5 years now due to lack of competitive663options. This limits the resiliency of our farm.664    It's time to take a look into these areas and assess what665bargaining strength the farmer has today. We have no doubt that666consolidation will continue, and the challenge for lawmakers667and the ag industry will be to balance the efficiency with668fairness and resiliency.669    [The prepared statement of Mr. Coppess appears as a670submission for the record.]671    Chairman Grassley [off mic]. Thank you, Mr. Coppess. Now,672Mr. Latham.673674                   STATEMENT OF JOHN LATHAM,675         PRESIDENT, LATHAM QUALITY, INC., ALEXANDER, IA676677    Mr. Latham. Thank you, Chairman Grassley, Senator Durbin,678and the entire Committee, for the opportunity to speak with you679today. My name is John Latham. I'm a third-generation seedsman680from Alexander in North Central Iowa. My grandfather, Willard681Latham, started our business in 1947. I own Latham Quality,682Incorporated, with my wife, Shannon, and my brother, Chris. Our683independent seed company sells corn, soybeans, and alfalfa seed684under the Latham brand in seven Upper Midwest States. We also685operate a soybean production plant and have a corn breeding686program.687    Independent companies are the lifeblood of rural America688because we are connected to the farmer customers we serve.689Independent seed companies can offer products better suited for690specific geographies than the multinationals. Unfortunately,691many independent companies are going out of business as these692multinational companies have become more powerful and, frankly,693predatory. The seed corn industry is 90 percent controlled by694two companies--90 percent--including their own brands and695licensing. Due to this massive consolidation, the price of696technology on our seeds has gone up significantly since 2021.697These higher seed royalty prices are contributing to higher698input costs for farmers and forcing many family farms to close.699    Prices aren't just increasing for the newest and latest700seed technology, but also in older technologies that are going701off patent or soon to be off patent. One example is NK603, a702glyphosate-resistant corn product which went off patent in7032022. Farmers are being charged the highest royalties ever for704this off-patent technology. More than 90 percent of biotech-705traded corn in the United States is glyphosate resistant, so706farmers are paying billions of dollars for seed royalties on a707trait that has been off patent for 3 years.708    As difficult as it's been for independent companies across709America, I believe we have been hit the hardest. Latham started710corn breeding in 2020 with the belief that we could create711niche corn products that could help our customers fight corn712diseases, like tar spot. We created products that weren't713available from our suppliers, but our very modest corn breeding714program was met with anger from our leading Big Ag provider.715After a heated discussion about our corn breeding program, in716April 2022, we were told Latham's corn products would have the717largest price increase in company history, and it did. Every718technology, even older technologies that had gone off patent or719soon to go off patent, were increased.720    Imagine having to license all your technology from your721largest competitor and then having to give your competitor722internal company information, including the names and orders of723all your customers. Imagine putting your hard-earned money into724a breeding program to help your customers but being forced out725by the dominant firms in the industry. Imagine being subjected726to restrictive rebate programs that require you to sell, near727exclusively, one company's technology in order to qualify for728those rebates, and imagine relying on those rebates to generate729any kind of profit. Imagine having your entire year of profits730being tied to off-the-record funding that can be taken away at731any time by your largest competitor. Imagine being in a732business where you don't know your costs of goods before you733buy it and your competitor can raise your costs at any time.734Imagine being in a business where the older products that you735can't sell increase in price, leaving you with a mountain of736expensive inventory and higher prices for farmers. Imagine737being in a business where the technology royalty continues to738increase even after it goes off patent. Seed prices increase739even when commodity prices are low, and farmers can't even740break even. Imagine being in an industry where it is impossible741to capture off-patent genetics because of restrictive licenses742and scrambled codes of the seed depository. These are the743unfortunate realities of an independent seed company in an744industry without competition or oversight. Farmers are paying745the price with higher input prices. The lack of new breeding746programs and diversity of genetics is a national security risk747where a bioterror attack or disease could threaten the Nation's748corn supply.749    I appreciate very much the opportunity to tell our story750and the story of other independent seed companies. I do so at751great personal risk, but I believe our company's story and the752story of independent, family owned seed companies, and the753farmer customers that we serve must be told. I look forward to754taking your questions. Thank you.755    [The prepared statement of Mr. Latham appears as a756submission for the record.]757    Chairman Grassley [off mic]. Thank you, Mr. Latham. Now,758Mr. Ragland.759760            STATEMENT OF CALEB RAGLAND, PRESIDENT,761           AMERICAN SOYBEAN ASSOCIATION, MAGNOLIA, KY762763    Mr. Ragland. Good morning, Chairman Grassley, Ranking764Member Durbin, and Members of the Senate Judiciary Committee.765It is an honor to join you today to testify on behalf of the766American Soybean Association regarding the State of the farm767economy and the impacts of rising input costs for farmers. My768name is Caleb Ragland. I'm a ninth-generation farmer from769Kentucky. I also serve as president of ASA.770    U.S. agriculture is facing significant challenges, which771are illustrated by rapidly plunging margins for farmers.772Commodity prices are down nearly 50 percent from highs773experienced just 3 years ago, and farm production costs774continue to skyrocket for land, seeds, fertilizers, pesticides,775and farm machinery, while high interest rates create additional776pressure. For soybean farmers, the loss of our largest export777market due to trade retaliation by China has made financial778problems even worse. We are hopeful that this market will be779restored following the meeting between Presidents Trump and Xi.780Still, high production costs and market losses mean soybean781farmers are expected to face a loss of around $109 an acre for782this year's crop.783    Farmers are paying more than ever to grow their crops. In784just 5 years, seed prices have increased by 18 percent,785fertilizer by 37 percent, pesticides by 25 percent, machinery786by 23 percent, and interest expense by 37 percent. Seed is a787key cost consideration for farmers. Advancements in seed788technology and pesticides have delivered real agronomic789benefits but at an added cost. The importance of seed quality790and pesticides to crop protection means farmers cannot cut791these costs. Fertilizer is a major component of overall792production cost. Unlike most other farming inputs, fertilizer793relies on global supply chains, which makes the cost794unpredictable. This is also a significant input risk that can795impact the farmer's ability to have an accurate budget.796    While agribusiness has faced much consolidation, ASA has797not done analysis to provide the Committee with an informed798position regarding the impact of consolidation on our input799cost. However, other factors are contributing to higher input800cost. The U.S. imports $33 billion in inputs annually. For801high-cost products, like fertilizer and pesticides, tariffs802create a heavy financial burden. IEEPA tariffs have raised803tariff-related input expenses for farmers from 1 percent to804over 12 percent this year. Inputs also depend on the global805market. Many fertilizers and half of the active ingredients for806pesticides are imported. Global dynamics, like demand shifts807and geopolitical issues, also impact prices. The high cost of808farm production has eroded the financial safety net of soybean809farmers and has made it harder to weather trade-related market810losses this year. ASA appreciates actions to investigate811competition and market dynamics impacting input price812increases, like the USDA and DOJ competition partnership and813the introduction of Chairman Grassley's Fertilizer Research814Act, which ASA supports.815    If high input costs continue on this path, farm816profitability for row crops, like soybeans, remains dire. As817Congress and the administration continue to address the overall818cost of farm production, I would like to highlight three819immediate achievable opportunities to improve economic820conditions for soybean farmers. One, remove IEEPA tariffs on821critical inputs, machinery, and parts, which will immediately822lower cost of production for farmers. Two, the 45Z tax credit823and proposed RFS volumes will drive investment in soybean824processing and biofuel production. That needs to be finalized825this year. And three, given the state of the farm economy,826targeted farm assistance is desperately needed to offset trade-827related losses and negative basis being experienced in many828regions.829    Thank you again for the opportunity to testify on behalf of830U.S. soybean farmers regarding the impact of rising input cost831on our industry. ASA appreciates the Committee seeking to832identify opportunities to improve the state of the farm833economy. I look forward to your questions.834    [The prepared statement of Mr. Ragland appears as a835submission for the record.]836    Chairman Grassley. Thank you, Mr. Ragland. Now, Mr.837Rosenbusch.838839              STATEMENT OF COREY ROSENBUSCH, CEO,840            THE FERTILIZER INSTITUTE, ARLINGTON, VA841842    Mr. Rosenbusch. Thank you, and good morning, Chairman843Grassley, Ranking Member Durbin, and Members of the Committee.844The Fertilizer Institute is made up of importers, wholesalers,845retailers, and manufacturers that serve our American farmers.846There are over 200 producers of fertilizers globally, and the847U.S. is 1 of 3 countries in the world that has more than 20848unique companies producing fertilizer. Half of the crop yields849in this world are made possible by the use of fertilizer. I850grew up in a small rural Texas town of Glenrose where we raised851hogs and my dad was the FFA advisor, so the highlight of this852job is to get out into the real world and visit with growers. I853was recently at a farmer's co-op meeting, and there were two854critical conversations that came up: the lack of market demand855for their crops and high input costs.856    Fertilizer prices were at historic lows just a few years857ago, followed by record highs. This kind of volatility is a858challenge for growers and for the fertilizer industry because859without farmers, there would be no fertilizer industry. We860often speak of fertilizer as a single product, but it is861actually many different materials, and most of our focus today862will be on the three macronutrients: nitrogen, phosphate, and863potash. They're each different resource-dependent materials864with very different markets.865    The United States does have significant production of866nitrogen in phosphate. However, we only have a small amount of867production of potash and import almost 98 percent of our need,86887 of which percent comes from Canada. The U.S. only accounts869for about 7 percent of total global fertilizer production, and870we are a net importer. Overall, 90 percent of all fertilizer871used in this world is used outside of the United States, so if872you hear nothing else I say today, please hear this. Fertilizer873is a globally traded commodity subject to fierce global874competition and supply and demand.875    To understand that supply and demand, we have to begin with876geopolitics. China is the world's largest producer of877fertilizers with about a third of all nitrogen and 40 percent878of phosphate production. They are currently restricting their879exports, which are forcing growers to source those tons880elsewhere. India, which is the second largest consumer of881fertilizers behind China, procure their products centrally882through the Federal Government, which is then heavily883subsidized for their farmers. Conflicts in the Middle East have884interrupted Egyptian and North African nitrogen operations due885to the natural gas supply, which is the feedstock for nitrogen,886largely coming from Israel. When Iran's nuclear facilities were887destroyed recently, it also seriously disrupted their888fertilizer production. Iran is the world's second largest889supplier of urea behind Russia. So, speaking of Russia, it's890the largest global exporter of fertilizer, and, of course, we891all know they're still facing sanctions because of the War in892Ukraine. Russia also supplied a lot of Europe's natural gas,893which resulted in about 70 percent of Europeans' nitrogen894production being curtailed a few years ago. That made Europe895the new marginal producer.896    So, you can see we've had significant global supply897shortages for fertilizer, but we've also had demand growth.898Fertilizer demand is tied to crop demand, and 50 percent of all899the crop nutrients used in the United States is driven by corn,900and while commodity prices have been low, we saw 8 million901additional planted acres of corn this year, which created even902more demand for fertilizer. Many of the largest globally traded903agricultural commodities that are experiencing price growth,904thus creating high fertilizer demand, are not even grown in the905United States, such as canola, coffee, and palm oil. We906recognize how challenging and frustrating this must be for our907customer partners at a time when they're experiencing very low908prices for the crops that they grow, and that's why we want to909be a partner with our growers and with policymakers to develop910some solutions.911    In the interest of time, I'll refer to my written testimony912for a detailed description of those policy solutions, but I can913summarize it by saying that fertilizer production facilities914are very capital intensive, sometimes costing as much as $5915billion for a nitrogen facility or 10 years to develop a potash916or phosphate mine. But I do want to be very clear that917fertilizer is a globally traded commodity, so while we cannot918directly influence prices, we can bolster domestic supply to919help mitigate geopolitical risks for our American farmers.920Thank you.921    [The prepared statement of Mr. Rosenbusch appears as a922submission for the record.]923    Chairman Grassley [off mic]. Thank you, Mr. Rosenbusch.924Now, Mr. LaVigne.925926  STATEMENT OF ANDREW LaVIGNE, PRESIDENT & CEO, AMERICAN SEED927                  ASSOCIATION, ALEXANDRIA, VA928929    Mr. LaVigne. Thank you, Chairman Grassley, Ranking Member930Durbin, and Members of the Committee for the opportunity to931testify for the hearing today. I'm Andy LaVigne, president and932CEO of the American Seed Trade Association, or better known as933ASTA. We were founded in 1883 and are one of the oldest trade934organizations in the United States. Its membership consists of935nearly 700 companies involved in seed production, distribution,936plant breeding, biotechnology, and related industries in North937America. Our members produce seed, from alfalfa to zucchini,938and in production systems, from conventional to organic to939biotechnology.940    Every season, farmers choose seeds that have been improved941through plant breeding, biotech, and seed treatments. Our942members ensure that farmers have access to reliable, resilient943seed varieties tailored to local growing conditions, helping944them reduce risk and boost crop productivity. Seed development945and production begins with advanced breeding and research946programs, moves to seed production with practices ranging from947large-scale crops to hand-pollinated varieties, then the seed948crop is harvested and concludes with conditioning, treatment,949and testing of the seed quality and purity prior to commercial950sale. This process could take place in multiple countries as951companies rely on different regional climates and leverage952multiple growing seasons per year to accelerate the rate of953both research and seed production activities. Even with this954highly efficient and optimized process, it can take 8 to 10955years and several million dollars just to bring a new variety956to market. Plant breeding and seed improvements is an ongoing957iterative process that depends on the market, pest and disease958evolution, and constant fluctuations.959    In the case of seed companies developing biotech products960or biotech seed, the cost of domestic and international961regulatory compliance are significant. A study in 2022962estimates the cost and time to bring a new biotech trade to963market at roughly $115 million and over 16 years. In export964markets, particularly for a subset of biotech crops, the seed965industry faces severe constraints from non-tariff trade966barriers, including countries that deliberately use their967regulatory system to stymie American seed innovation and968exports of American grain products.969    The seed sector has a long history of delivering seed970choice and ensuring seed performance for America's farmers,971gardeners, and landscape managers, ensuring the best seed is972available to meet the needs of the wide range of environments,973soil types, and management practices. International trade and974global movement of seed is critical to the U.S. seed industry975to efficiently develop and commercialize and improve varieties976for U.S. farmers. Across all seed varieties, the continued977escalation of tariffs on seed poses a unique challenge. For978example, a tomato seed can cross six or seven different979international borders for research and development to do seed980multiplication and clean and package seed before it's sold to a981farmer. For each crossing, a tariff may be levied on that same982seed, burdening the same seed producer multiple times.983    Our industry believes there's a path forward to alleviate984some of the pressures that both farmers and seed producers985currently face. First, we're advocating, both domestically and986internationally, for risk-proportionate, science-based987regulatory reform to right-size regulatory compliance processes988and the associated costs that impact companies of all sizes.989Our advocacy applies to plant breeding innovations, like gene990editing, as well as biotech crops. Reform is needed to ensure991that rapid pace of scientific innovation is not hampered by992unjustified regulatory obstacles. Second, and I'll hit this993very quickly, but most important is our investment in994agricultural research, not only from the private sector but995from the public sector. Our partners in our land grant996institutions and our research institutions are vital in this997process as we go forward in discovering the genetics-based998science, and that needs to continue, and they're stressed as999all of you know right now. Research at the land grant1000institution is even more important as we look at our lower1001acreage crops. Fruits and vegetables, forages, grasses, turf is1002very important to help in that public/private partnership to1003bring improved varieties to the marketplace.1004    So, in closing, from seed to table, the entire agricultural1005value chain is navigating pressures from the brunt of inflation1006and economic uncertainty. We know that farmers are taking this1007economic challenge head on to continue feeding, fueling, and1008clothing the world. Seed producers are weathering it alongside1009them while working to deliver the high-quality, professionally1010produced seed U.S. farmers expect season after season. And when1011farmers buy that bag of seed, they're investing in yield1012potential, resilience to pest and weather, and the ability to1013produce more with less. They're investing in better seed for1014better crops for better quality of life. Thank you, Chairman1015Grassley, Ranking Member Durbin, and Members of the Committee.1016I look forward to answering the questions.1017    [The prepared statement of Mr. LaVigne appears as a1018submission for the record.]1019    Chairman Grassley. Thank you, Mr. LaVigne. Now, Dr. Moss.10201021    STATEMENT OF DIANA MOSS, VICE PRESIDENT AND DIRECTOR OF1022 COMPETITION POLICY, PROGRESSIVE POLICY INSTITUTE, WASHINGTON,1023                               DC10241025    Dr. Moss. Thank you, Chairman Grassley, Ranking Member1026Durbin, and Members of the Committee. It's an honor to be here1027today. I am Diana Moss, director of competition policy at the1028Progressive Policy Institute.1029    Seeds and fertilizers feature highly concentrated markets1030with only a few firms, high prices, and little choice. Both1031sectors have been the subject of massive consolidation and1032strategic business practices. In the late 2010's, the six large1033agricultural biotechs merged to form the Big Three. Today, two1034firms control 72 percent of the corn seed market and 66 percent1035of the soybean market. Three firms control 83 percent of the1036cotton seed market. Fertilizer markets are also highly1037concentrated. The four-firm ratio for nitrogen in the U.S. is1038about 77 percent, and the four-firm ratio for potash and1039phosphates is 100 percent. These are big numbers. Highly1040concentrated markets are far more conducive to anticompetitive1041coordination rather than the hard-nosed competition that lowers1042prices, lowers licensing fees, tech fees, and royalty rates.1043    So, what does high concentration mean for input costs and1044food prices? To be sure, they are affected by the dynamics of1045supply and demand, shocks to supply chains, such as weather and1046disease and U.S. trade policies. But as seed and fertilizer1047markets have become more concentrated, it is hard to dispute1048that consolidation and business practices have played a major1049role. U.S. farmers struggle with the high cost of intermediate1050inputs, such as seeds, pesticides, and fertilizers, which1051account for almost 40 percent of their total intermediate1052production costs. In the last 30 years, the average price1053farmers paid for genetically modified seed rose by almost 4501054percent, while their commodity prices increased by only 501055percent. In fertilizers, prices for phosphorus, potash,1056nitrogen spiked dramatically in 2008, again in 2012, and again1057in 2022, raising concerns about the potential for collusion1058amongst global fertilizer producers. All of this puts the1059squeeze on farmers' margins.1060    The Crop Farm Index for prices farmers receive for their1061commodities has remained consistently below the index for1062prices paid by farmers for feed, fuels, seeds, and fertilizers.1063These supra-competitive input prices initially harm farmers,1064but they quickly translate into high food prices for consumers1065who are already grappling with a high cost of living. Consumers1066spend 13 percent of their limited budgets on food, the third-1067largest budget item behind housing and transportation. Public1068concern about food price inflation is at an all-time high.1069    In light of these troubling trends, I believe we need to1070widen the lens on competition and agricultural inputs.1071Antitrust's role has been less than exemplary as concerns over1072excessive consolidation in ag biotech and potential price1073fixing in fertilizers has gone largely unpursued. The agencies1074have also ignored other costs of consolidation, such as1075delaying entry of generic GM seed, bundled cropping systems1076that are engineered not to operate with other products and lock1077out smaller innovators. Antitrust has also ignored the loss of1078stability and resiliency in supply chains that are created by1079market power bottlenecks. These issues now transcend1080traditional competition policy concerns.1081    U.S. farmers should be able to count on fair commodity1082prices, input costs, and sustainable margins. Consumers should1083be able to count on low food prices. Both farmers and1084consumers--most important--should be able to count on having1085choice in what they buy and who they buy it from. A more1086coherent policy approach is to strengthen antitrust1087enforcement. Another approach is to require more or better1088coordination between the DOJ, the FTC, and USDA, including1089better data collection to promote price transparency. We might1090also consider giving USDA authority to intervene if1091consolidation raises supply chain safety, stability, and1092resiliency issues. With farmers in the middle of this vortex,1093we should also be very worried that high concentration costs,1094prices, and a lack of choice risk the permanent loss of U.S.1095agricultural productive capacities if farmers hang up their1096hats and close down their farms. This all means that promoting1097competition should garner broad bipartisan support.1098    I appreciate the opportunity to appear here today and look1099forward to your questions.1100    [The prepared statement of Dr. Moss appears as a submission1101for the record.]1102    Chairman Grassley. I compliment all of you for staying1103within the 5 minutes. We're going to have 5-minute rounds of1104questioning. You'll see Members in and out because there's two1105votes on the floor, so we'll take turns questioning.1106    Mr. Rosenbusch, in 2014, the Obama administration1107discontinued annual reports on the fertilizer industry. Since1108then, prices have become more and more opaque, making it harder1109for farmers to know if they're getting a fair deal. My1110Fertilizer Research Act seeks to fill in these reporting gaps.1111So, could you tell us what measures are being taken to ensure1112transparency and pricing mechanisms so farmers aren't unfairly1113penalized by last-minute price increases?1114    Mr. Rosenbusch. Mr. Chairman, thank you for that question,1115and we fully support your efforts to provide transparency to1116growers. We believe them having information about what's going1117on in the marketplace is very critical. We've been working with1118your staff, your team, as well as on the House side to1119reinstate the position at the United States Department of1120Agriculture that has been vacant for more than 20 years now1121that was focused on fertilizer pricing and transparency. We1122believe growers having that independent source at USDA would be1123of tremendous benefit to growers and to farmers to be able to1124recognize and understand all of these dynamics that are going1125on and help them make decisions.1126    Chairman Grassley. Would that also cover price transparency1127that you're talking about?1128    Mr. Rosenbusch. Yes. They would also be doing research on1129prices globally, United States. They would be looking at a1130variety of different factors. Iowa State also did a research or1131a report on this a couple of years ago, but we believe that1132position would be helpful long term.1133    Chairman Grassley. Okay. Dr. Moss, in your opinion, what1134types of public reporting could provide the necessary1135transparency in fertilizer markets for farmers looking for a1136fair price?1137    Dr. Moss. Thank you for the question, Chairman Grassley. I1138think, first and foremost, increasing price reporting to1139promote transparency would be incredibly helpful not only for1140members of the industry, but for organizations like mine, think1141tanks, and university researchers to be able to do analysis of1142the markets and the prices that are emerging from highly1143concentrated markets. Price transparency remains a problem in1144agricultural inputs, but also in cattle and ranching, so I1145think that, in fact, the starting point is to improve and to1146promote coherent, efficient price collection data bases so that1147we can have better tools to work with.1148    Chairman Grassley. For Mr. Latham, Mr. Coppess, major1149mergers and business transactions over the last decade reduced1150the Big Six ag companies to only four. U.S. Department of1151Agriculture Economic Research Service reports that Bayer and1152Corteva together account for more than half of the U.S. sales1153of corn, soybean, and cotton seed. What impact does this have1154on your business? Has there been an impact on the number of1155corn or soybean varieties available to farmers?1156    Mr. Latham. Thank you for the question, Senator. It's been1157a huge impact on our business, especially in the last 5 years.1158My brother and I, who's with me today--Chris--we were looking1159at prices over the last 5 years. Five years ago, 42 percent of1160a bag of seed went to seed royalties. Now 70 percent of a bag1161of seed goes to seed royalties, and, unfortunately, there's1162been no new innovation. These are the existing products that we1163had 5 years ago. There's been no new innovation, no upgrade.1164There are some new products but, overall, from 42 percent to 701165percent has risen prices tremendously, and they did it because1166commodity prices were good at the time a few years ago, and1167they said, well, farmers can afford it now. So, the prices went1168up significantly, and now, unfortunately, commodity prices are1169down, and those prices haven't gone down at all.1170    Chairman Grassley. Mr. Coppess.1171    Mr. Coppess. Thanks for the question, Senator Grassley. On1172our farm, when we purchase seed, I have a relationship I enjoy1173with a company and a seed person that we work with, and I'm not1174looking to change that relationship, but we have very little to1175no price bargaining. The price is the price, and it's1176consistently gone up every year with some slight changes. If a1177product doesn't perform, it might be a little cheaper the next1178year, but we've seen no relief in pricing of our seed1179commodities.1180    Chairman Grassley. Okay. Dr. Moss, in your opinion, if a1181trade owner conditions access in ways that predictably raises1182rivals cost or limit stacking with competing traits, is that a1183problem and should it trigger enforcement?1184    Dr. Moss. Yes, I do believe that is a problem. One of the1185biggest issues that we face right now is with the large ag-1186biotech mergers. We now see highly integrated, engineered1187systems of traits development, traited seed, agrochemicals, and1188now digital farming. It is very, very difficult for smaller1189innovators--say, independent seed companies or independent1190trade innovators--to penetrate markets, to get into a market,1191get a foothold, and to compete and effectively distribute their1192technologies when they are facing an enormous castle wall of a1193vertically integrated platform. And if companies hold a1194dominant position in any of those markets, that makes the walls1195even higher to scale.1196    Chairman Grassley. Yes. Senator Durbin, before you go, has1197the vote started yet? Well, we'll wait and see. If we do, then1198Senator Lee's going to take over. Go ahead.1199    Senator Durbin. Thanks, Senator Grassley. I'd like to say a1200word and get your reaction on the question of agricultural1201research. Since the 1930's, U.S. Government-funded ag research1202has helped to boost our farm output by 170 percent, according1203to the USDA. Today, most agricultural research in the U.S. is1204funded by large private sector companies, not the Government.1205Agricultural research funded by the U.S. Government has1206plummeted in the past 30 years, while Chinese Government1207investment in ag research has risen 8 times, surpassing the1208U.S. 10 years ago. Today, China is the world's biggest funder1209of government-funded farm research. The Trump administration1210and the DOGE cowboys want the USDA to close and consolidate a1211federally funded laboratory at the University of Illinois, the1212Soybean Germplasm Collection, which is the genetic seed bank1213whose scientists, since the 1940's, have cured soybean disease,1214improved soybean yields, and developed new varieties and uses,1215again, creating new markets for farmers. If this lab and its1216resources are closed or diminished, there is only one other1217remaining lab. You want to guess where it is? China. Is there1218anyone on this panel that thinks that's a good idea?1219    [Nonverbal responses.]1220    Senator Durbin. Obviously not. Mr. Latham, that kind of1221resource in agri and Federal research has to be part of your1222calculation as well when you talk about innovation, is it not?1223    Mr. Latham. Yes. I would love to see more investment in ag1224research from public universities. That'd be very helpful.1225    Senator Durbin. Well, I hope you'll all express that to1226your Members of Congress and the people you talk to.1227    Dr. Moss, over the last decade, as you've noted and others1228as well, a series of mergers and acquisitions produce Big Three1229companies that dominate different sectors. In the seed sectors,1230it's Bayer, Corteva, and Syngenta. A similar trend produced the1231Big Three in fertilizer, Mosaic, Nutrien, and CF. Should1232antitrust enforcers at the FTC and Department of Justice have1233done more to block these mergers that produces the Big Three in1234seed and fertilizer?1235    Dr. Moss. Thank you, Senator Durbin. The answer is an1236unequivocal yes. These massive mergers, which have completely1237restructured our seeds and fertilizer industries, are now1238responsible for high prices, limited choice, and less effective1239innovation. The major problem with antitrust today, especially1240in food and agriculture, is a very narrow view that antitrust1241takes in defining markets. The divestitures that were taken in1242the Bayer-Monsanto and the Dow-DuPont mergers were very1243targeted, very small, and there was a lot of deference to1244giving companies their mergers so that they could innovate1245better or innovate faster. We now know that high levels of1246concentration are not necessary to drive innovation, and these1247mergers, on balance, produced more harm than good.1248    Senator Durbin. Do you believe the FTC and DOJ need new1249legal tools to stop the anticompetitive practices of these1250dominant firms, or is it simply a matter of stepping up1251oversight and enforcement?1252    Dr. Moss. I think antitrust plays a very important role1253given the limited set of tools, but powerful tools antitrust1254works with. The consumer welfare standard can approach concerns1255about high prices, about lower quality, about less innovation,1256but the bottom line is most of antitrust enforcement just1257focuses on prices. The kinds of problems we see in food and ag1258are bottleneck supply chains, loss of resiliency and stability,1259a delay of generic entry. These are all things that are much,1260much harder for antitrust to approach in the normal course of a1261merger investigation or a monopolization investigation, which1262is why I mentioned we might want to start thinking about giving1263USDA more authority.1264    Senator Durbin. Mr. Rosenbusch, how do you respond to those1265observations?1266    Mr. Rosenbusch. Thank you, Senator, for that question. We1267believe we need a strong domestic fertilizer industry to1268compete in a global marketplace, especially when you're looking1269at countries that are often State-owned enterprises producing1270fertilizers. We think the FTC has taken a close look at this.1271As a matter of fact, in the last 2 years, the two acquisitions1272in this space were carefully studied by the FTC and reviewed,1273and we've also seen the USDA, 2 years ago, go through a1274competitive analysis of the industry to ensure that we are1275competing on a global level and global supply and demand for--1276--1277    Senator Durbin. Excuse me for interrupting, but I have just127820 seconds left. The farmers who are buying your product say1279you're killing them. You've consolidated, so they have few1280choices, take-it-or-leave-it choices, and your prices are1281killing them. When you say you're competitive globally, it1282doesn't help the farmer in Illinois and Iowa to know that the1283global market is competitive. How do you respond to that?1284    Mr. Rosenbusch. We need the farmers to succeed. They need1285access to fertilizer----1286    Senator Durbin. But you're killing them with your prices.1287    Mr. Rosenbusch. And those are all driven by global supply1288and demand. A lot of these geopolitical events and reliance on1289some of that foreign supply coming in is a huge impact on that.1290    Senator Durbin. Thank you.1291    Senator Lee [presiding]. Mr. Latham, I'd like to start with1292you, if that's okay. Where are the main barriers that1293independent seed companies face when licensing or stacking1294patented traits in this industry?1295    Mr. Latham. Where do I begin? There's a long list, a lot of1296areas that I could go into. You know, one thing that I think1297has hurt the industry in general, we have these restrictive1298rebates that we're under, which really stifle competition1299because if a new breeding company comes into the market and if1300the whole industry is under a rebate, that if they go to that1301new innovator, they're going to lose their rebate and could1302fall off a cliff there. So, I think that's one thing that's1303really impacting the whole industry, and there's a whole longer1304list, and I know you have short time.1305    Senator Lee. Now, when we think about intellectual property1306laws, they're kind of a paradox because, on the one hand, the1307whole point of intellectual property laws is to give someone at1308least a temporary monopoly in something, but on the other hand,1309they are pro-competitive to the extent that it fosters1310innovation. In your view, how does our current intellectual1311property framework either help or hinder competition or1312innovation?1313    Mr. Latham. Yes. I think I'm all for patents and1314intellectual property protection. Obviously, that can create1315innovation. You have to have that to have innovation, but,1316unfortunately, we see some of these patents where the products1317get stacked with some new product only to be able to use to1318extend that patent, and so the patents go from 20 years to many1319more years. And unfortunately, in 2014, a lot of different corn1320traits went off patent, and we still don't have any market now1321for off-patent technology on the corn side of the business, so1322something needs to fundamentally change.1323    Senator Lee. What about consolidation? When there's1324consolidation among the major players in the seed industry and1325among trait owners, how does that influence your research and1326development strategy internally?1327    Mr. Latham. Yes. Unfortunately, on the corn side, and you1328mentioned the stat, too--90 percent--and that includes1329licensing as well as their own brands. But when you have that1330big of consolidation, it makes it very difficult for any new1331innovator to get into the market. Especially if they want to do1332traited or just even conventional, it makes it very difficult,1333so, we've seen. Since 2016, when the Committee met last, we've1334seen massive consolidation, we've seen less innovation, and1335we've seen much higher prices, unfortunately, for our farmer1336customers.1337    Senator Lee. Those two things naturally lead one to1338another, right? I mean, diminished competition pretty much1339always is going to result in higher prices----1340    Mr. Latham. Absolutely.1341    Senator Lee [continuing]. Or at least diminished quality,1342sometimes both.1343    Mr. Latham. Absolutely.1344    Senator Lee. And there's no exception to that here and the1345more consolidation you see, regardless of what the cause of1346that is. But let's suppose if it's prompted by an excessive1347Federal regulatory footprint, that can do it, but regardless of1348what the cause is, there are fewer competitors. There is often1349less competition, and, always, when you see less competition,1350that causes other problems. Mr. Coppess, have you noticed1351reduced competition or consolidation among local dealers or1352fewer independent options over time?1353    Mr. Coppess. Thank you for the question. Yes, the1354independent seed companies, when somebody retires, moves on,1355oftentimes that doesn't get replaced by a younger person or a1356new person taking on that business. That dealership just goes1357away oftentimes.1358    Senator Lee. Okay. That's helpful. And, Mr. Ragland, how1359does dependence on imported potash and imported nitrogen affect1360the U.S. growers' resilience and planning?1361    Mr. Ragland. Well, as we mentioned in our testimony, it's a1362global market, requires a lot of planning ahead. There's global1363forces at work, and we have a very limited number of options1364where we can purchase, and the less competition, oftentimes the1365higher the prices are.1366    Senator Lee. Right.1367    Mr. Ragland. And we have some data we provided that shows1368that since the Ukraine War, in particular, prices spiked up1369drastically when that started. They came back down, but they1370have plateaued at a much higher cost than they were before.1371    Senator Lee. Than they were before the war.1372    Mr. Ragland. Yes. Yes.1373    Senator Lee. They never fully retreated.1374    Mr. Ragland. No, not anywhere close, and that has had a1375major impact across all of production and agriculture.1376    Senator Lee. Right. Somewhat reminiscent of what happened1377during COVID.1378    Mr. Ragland. Yes.1379    Senator Lee. And finally, Mr. Rosenbusch, how did dealer1380incentive programs work in practice, and did they inadvertently1381limit fair competition?1382    Mr. Rosenbusch. Thank you for that question, Senator Lee.1383On the fertilizer side, we do not have dealer incentive1384practices. That's more of a crop protection practice.1385    Senator Lee. Okay. Thank you. My time has expired. Senator1386Klobuchar is up next.1387    Senator Klobuchar. Okay. Thank you very much, Senator Lee,1388and thank you to the Chairman and Ranking Member for holding1389this hearing. I'm used to seeing many of you. I'm Ranking1390Member, as you know, on Ag, especially you, Mr. Ragland. I know1391you've testified before. I also note that Gail Slater is here,1392the head of antitrust for the Justice Department, who has had1393widespread support on this Committee.1394    So, one of my farmers, a soybean farmer actually, described1395this situation right now as a perfect storm of ugly. He talked1396about the input costs, some of which are caused by1397consolidation that we've been so well talking about today,1398talking about what's happening with labor and the fact that we1399are missing some ag workers right now, and I think there's1400another way this could be handled. Talked about the tariffs and1401IEEPA, and I note that with soybeans, and I am, you know, glad1402that there's discussions going on, but even if that somehow1403that market came back immediately, as you know, Mr. Ragland,1404which it won't do, it's still a horror for our farmers in terms1405of half of their market is China, but the other half is other1406countries, nearly all of which are also subject to these1407tariffs.1408    And so, I just think that if you look at this as a whole,1409and not just with soybeans, but for other crops, and what's1410happening with machine parts, as you point out, that this is a1411really hard thing that's going on right now, and I would like1412to see a reversal of these tariffs. I think that would be the1413quickest way to solve many of these problems, but let's start1414with market consolidation, and I'll start with you, Mr. Latham.1415What would it mean to you to have real competition in the seed1416market?1417    Mr. Latham. Thank you for the question, Senator.1418    Senator Klobuchar. Yes.1419    Mr. Latham. It would mean everything to us, I think, if you1420had no restrictive rebates. The rebates are very punitive for1421independent companies. If you had broad licensing, I think you1422could see a flood of new breeding companies into the market,1423which is vastly needed. I think with gene editing, there's a1424whole host of new technologies we could take advantage of, but1425right now, when you've got a couple different companies that1426are controlling the whole market, it makes it very difficult1427for our company----1428    Senator Klobuchar. Okay. Thank you.1429    Mr. Latham [continuing]. To invest in new technology.1430    Senator Klobuchar. Thank you. That's helpful. Ms. Moss,1431quickly, how does consolidation affect the resiliency of the ag1432system?1433    Dr. Moss. Thank you, Senator Klobuchar, for the question.1434Consolidation is now responsible, in many food ag supply chains1435as well as in healthcare, for creating enormous market power1436bottlenecks where you have powerful companies, oligopolies, or1437dominant firms controlling prices paid to producers, but then1438also controlling prices that consumers have to pay in the1439grocery store. These bottlenecks are really susceptible to1440instability. If a supply chain is hit by some sort of exogenous1441shock, like weather or disease as we saw with COVID, then there1442are very few other competitors to step in, and so supply chains1443go down, and that is not only a national security issue, but a1444health and human safety issue.1445    Senator Klobuchar. And just a quick answer on this because1446I called you as a witness many times when I Chaired the1447Antitrust Subcommittee, now working with Senator Blackburn on1448the Tech Subcommittee. Would reform to our antitrust laws with1449either the CLARITY bill or the bill that Senator Grassley and I1450have introduced, which is just beyond specific industries,1451would that be helpful when it comes to these issues?1452    Dr. Moss. Absolutely, yes.1453    Senator Klobuchar. Okay.1454    Dr. Moss. Anything to strengthen, modernize, and clarify1455our laws.1456    Senator Klobuchar. Okay. Thank you. Mr. Ragland, could you1457talk about the market for soybeans outside of China and what's1458happening with some of that as well because I think all the1459focus gets on China, but there's a lot of other countries.1460    Mr. Ragland. Well, those markets outside of China are1461roughly half of our exports. China's the other half of our1462exports, and those markets are fairly strong, but they're only1463a limited amount of the demand for our product, and that gaping1464hole that is left by the lack of the China involvement is----1465    Senator Klobuchar. Mm-hmm.1466    Mr. Ragland [continuing]. Very detrimental on our prices1467right now.1468    Senator Klobuchar. And is the tariffs under IEEPA affecting1469all of these markets?1470    Mr. Ragland. Yes.1471    Senator Klobuchar. Mm-hmm. That's what my----1472    Mr. Ragland. Yes.1473    Senator Klobuchar. So, in my State, about 60 percent of the1474soybeans are exported, which is pretty high. Do you want to1475talk about, just in general, the export market, which we1476cherish, and not just for soybeans, but corn and other things,1477why that's such an integral part of American agriculture1478because we're not going to eat everything we make.1479    Mr. Ragland. Yes. Soybeans are the largest ag export from1480this country, and it's so vital to the economy, not just of1481agriculture, but of rural America.1482    Senator Klobuchar. Mm-hmm.1483    Mr. Ragland. And that gaping hole that is left by the lack1484of the China involvement right now is going to trickle down to1485our rural communities and rural economies----1486    Senator Klobuchar. Mm-hmm.1487    Mr. Ragland [continuing]. And have a very detrimental1488impact because rural America agriculture is the backbone of1489rural America.1490    Senator Klobuchar. Right. I think we make about 20 percent1491more than we use here, and that is what allows us to keep going1492and why this is such, as my farmer called it, a perfect storm1493of ugly. Thank you.1494    Mr. Ragland. Thanks.1495    Senator Grassley. Senator Britt is next, but I hope we can1496keep this hearing on [off mic] competition and price1497transparency. Go ahead, Senator Britt.1498    Senator Britt. Thank you. Mr. Chairman, thank you for1499holding this hearing on this critical and timely issue.1500    Agriculture is the bedrock of Alabama's economy. So, 1 in 51501jobs in our State are tied to the agriculture industry. I am so1502proud of our farmers and what they do, knowing that they feed1503and clothe people, not just coast to coast, but across the1504world, you know, ranking in the top States in the country,1505Alabama does, when it comes to poultry, when it comes to1506catfish, peanuts, cotton, and we are really proud of the work1507that our farmers do. And Alabama farmers are acutely familiar,1508though, with the impact of skyrocketing input costs and what1509that's done on the bottom line. When we look at, like, the last15104 years, knowing that input costs, I mean, have gone up across1511the board, but that our agriculture community has been hit the1512hardest, and just knowing that farmers are experiencing record-1513breaking yields, but yet losing hundreds of dollars an acre.1514And so, when you try to square these things up, you know that1515we have to do something. In fact, based on historical yields,1516every major row crop, from peanuts to cotton to soybeans, will1517be produced at a loss in 2025.1518    And so, food security is national security. We say that all1519the time, but we also know that our agriculture community and1520our farmers are the bedrock of our rural communities, and if1521farmers are not thriving, our rural communities are not either,1522and so there is so much at stake in making sure that we get1523this right. There are real concerns with the limited number of1524companies that provide seed, fertilizer, and crop protection1525products to our farmers, but that consolidation doesn't stop1526with inputs. We also see the same consolidation in packers, in1527equipment manufacturers, and in farms to a certain extent. Crop1528input suppliers, manufacturers, and farmers have generally been1529forced to grow larger to achieve economies of scale and1530increase productivity while attempting to decrease costs.1531    I want to start with Mr. LaVigne. It's clear that the1532primary driver of consolidation across the industry is a desire1533to lower costs. We've seen the consolidation, but instead of1534prices going down for our farmers, we've actually seen the1535opposite. Can you speak to some of the outside pressures that1536have prevented the industry from achieving true economies of1537scale?1538    Mr. LaVigne. Senator Britt, thank you for that question1539very much. As we've continued to innovate in the agriculture1540industry, especially on the seed side, the cost of the1541regulatory compliance, especially in the GM or the biotech1542arena, has increased dramatically, and working with the grain1543industry to ensure that the markets that we export to, or our1544farmers export to, are open and have transparent processes to1545review those new products that come to market has been extreme.1546We've seen that in China, and we share the Chairman's comments1547that we hope to see good news come out of that this week1548because we were supposed to have those approvals in a phase one1549deal with China, and now we don't have those. So, the1550regulatory costs have become extremely high and challenging as1551we try to bring new products to market.1552    But I think we've got several regulations in place that are1553out of date. We have a very strong safety record with the1554production of new varieties and biotech traits. Over the last155530 years under the Coordinated Framework, that has not evolved.1556We've not changed that process to make it more efficient for1557new companies to come into the marketplace as well as new1558products, and it's become harder and less science-based. The1559same with new varieties. As we look at, as John mentioned, gene1560editing as a tool, how is FDA, EPA, and USDA going to manage1561those policies coming into the marketplace? If they're too1562burdensome, it will be restricted to large companies that can1563afford the regulatory process.1564    Senator Britt. Thank you so much for that, and I want to1565stay on that theme. Look, I've been encouraged by many of the1566things that Administrator Zeldin has done and the things he is1567looking at doing in the future. My question, Mr. Rosenbusch,1568is, in what ways do Federal regulations impact your member's1569companies' ability to bring innovation and affordable products1570to market?1571    Mr. Rosenbusch. Thank you, Senator Britt, for that1572outstanding question because it is a huge impact on our1573manufacturers that are wanting to innovate and bring new1574products or even grow supply domestically. As we look to expand1575mining operations or build a new ammonia plant, you've got1576environmental permitting that needs to be streamlined. You also1577have new products. That you know, it's difficult to know where1578they get regulated, and so as you think about some bio-1579stimulant products that we're looking at or even tools that1580help nitrogen be more efficient, getting through the process at1581EPA or ensuring that it's regulated to the State level, which1582is where most fertilizer is regulated, is critical to giving1583farmers additional tools, especially in these difficult market1584times.1585    Senator Britt. Thank you so much. Thank you, Mr. Chairman.1586    Chairman Grassley. Senator Booker.1587    Senator Booker. Mr. Chairman, as always, I'm grateful for1588the deference. I want to thank all the witnesses. Your1589testimony was very, I would say, frankly, invaluable.1590    Mr. Latham, I'd like to start perhaps with a question for1591you. Despite two court orders in 2020 and 2024 banning dicamba1592use because of its damage to neighboring farms, causing1593millions of acres of crop loss, the Trump EPA, headed by a1594former industry lobbyist, recently proposed to reauthorize the1595herbicide. What impact would it have on your rural community1596and the farmers that you serve if EPA again approves dicamba1597for over-the-top use?1598    Mr. Latham. Yes. Thank you very much for the question,1599Senator Booker. I, frankly, believe, I mean, we've seen enough1600issues that I think the technology is good and is needed1601because we need to be able to fight against weed resistance,1602but yet over-the-top causes so many issues that I don't think1603that it should be approved for over-the-top use.1604    Senator Booker. That's great, because if it was, what would1605happen to the communities if it was again approved for over-1606the-top use?1607    Mr. Latham. I mean, unfortunately, we've seen1608volatilization, we've seen drift into other crops, and, you1609know, and vineyards and different things, so it's become an1610issue in rural areas.1611    Senator Booker. So, knowing what you know, what you just1612stated about how harmful it is and would be, as a practical1613manner, if it's once again approved, would your seed company1614have any discretion in whether or not to sell dicamba-tolerant1615seeds?1616    Mr. Latham. You know, unfortunately, probably with the1617rebates, we would probably have to sell it to be able to make1618our rebates, unfortunately.1619    Senator Booker. I mean, that seems stunning to me that1620something that you know should not be used in this way, but1621just to stay competitive in the market, you would have to sell1622it. Does that strike you as indicative of free market1623capitalism?1624    Mr. Latham. It does not, and I don't like it either. I1625mean, I think we should be able to sell what our customers want1626and the best value for them.1627    Senator Booker. Yes, and it really strikes me as not just1628an assault on free market capitalism, but something almost akin1629to an authoritarian system where you're told what you have to1630do, what you have to plant, what chemicals you have to use, and1631that's something that is very un-American to me. Would you1632agree?1633    Mr. Latham. I agree.1634    Senator Booker. Dr. Moss, I'm going to soon be introducing1635legislation to not only require--excuse me--not only place a1636moratorium on any new Big Ag mergers, but also require the DOJ1637to do a lookback at the biggest mergers over the last 20 years1638in the food and agricultural sectors to unwind any mergers that1639the DOJ finds caused material harm to competition, or to1640farmers, or to workers or consumers. Dr. Moss, do you think1641that this type of lookback would be beneficial, and if it was1642conducted, do you expect that many of the previously approved1643mergers would be found to have caused material harm?1644    Dr. Moss. Thank you, Senator Booker, for that really good1645question. Yes, I think the value of retrospective studies for1646consummated mergers is really critical and invaluable. We in1647the economics community have agitated and urged and encouraged1648enforcers to spend more time doing lookbacks. Of course,1649they're resource intensive, and I know there are a number of1650pieces of legislation that would fund those types of efforts. I1651think at the stage we are at in food and ag, with the high1652levels of concentration and demonstrable evidence of high1653prices and slower innovation, the lookbacks would be really1654important. Ultimately, it's really up to the agencies to1655enforce very strong structural presumption against highly1656concentrative mergers. Unfortunately, we're still not there,1657and in the Dow-DuPont and the Bayer-Monsanto mergers, those1658structural presumptions for high concentration did not get a1659lot of attention, and now we're paying the price for that.1660    Senator Booker. I mean, we consumers are paying the price1661for it, but our farmers are paying a tremendous price as this1662concentration of these very powerful companies, who now,1663frankly, thanks to Citizens United, poured millions and1664millions of dollars advocating for their mergers down here in1665Washington, but the real people being harmed are consumers,1666but, frankly, are our farmers themselves. And that brings up a1667final question, and I'm hoping Noah, I really appreciated your1668testimony, but given the extreme consolidation within America's1669agricultural industry, do you have any flexibility to purchase1670seeds or fertilizers from firms other than the Big Four?1671    Mr. Coppess. Thank you for the question, Mr. Booker. We1672have retail locations that serve the needs for the fertilizer.1673We don't have the on-farm storage to handle some of those1674products. It's unclear often who the wholesale manufacturer is1675for that product, but you can tell when you go from retail to1676retail to retail and the price is the same, that we're coming1677from the same place.1678    Senator Booker. Thank you. As the Chairman knows, I spent a1679lot of time in Iowa and met a lot of farmers from across the1680political spectrum. This gentleman here moved me when he said1681five generations on his farm, and I still remember sitting with1682farmers who still had that original deed going back to the16831800's and the pride of every generation being able to not just1684make a living, but raise their families, and strengthen their1685communities, and provide for American hunger and demand, and1686suddenly, the economics that worked for five generations just1687barely add up. There's a nobility, sir, about what you do for1688America. You are great patriots, and I know how much you care1689about American farmers, sir. So, I'm really hoping we can find1690some bipartisan work to do together and keep people, like Noah1691and his family, at the center of our thought process because we1692can do something. This is not inevitable. This is un-American.1693This is a perversion of the free market. If we give them a1694chance to compete, I promise you that family will have another1695five generations of success on their farm.1696    Chairman Grassley [off mic]. Senator Moody.1697    Senator Moody. Thank you, Mr. Chairman, for holding this1698important hearing. I don't know that many people across the1699country have an understanding of how American agriculture1700touches not only their everyday lives, but their security. And1701I think this hearing is so important, whether they live in Iowa1702or Florida's heartland, which is where I am from, Plant City,1703Florida, the winter strawberry capital of the world--proud to1704hail from them from there--and also now represent Florida as1705their newest U.S. Senator. But agriculture is so important to1706our cities and States, indeed our Nation, and if there is one1707takeaway from everything that we're hearing and what every1708witness, I think, would agree with is that our food supply1709chain, its success, its security, is a matter of national1710security.1711    COVID-19 really put this into focus for us as a country.1712For a long time, we never really thought about food, where it1713came from, many people, but then suddenly we were facing1714shortages in, certainly, many areas--PPE, other products--and1715we had to start looking to China. So, the same country that was1716responsible for COVID, we then had to import products from them1717to protect Americans. We faced medicinal shortages. Where did1718we have to look? China. I mean, there were so many places when1719it came down to a crisis point that we had to go back to our1720foreign adversaries when we determined we had weaknesses in our1721supply chain, and there is risk that comes with relying on a1722foreign country for critical supplies.1723    Corporations, over time, have focused more and more on1724lowering costs by offshoring, relying on foreign inputs,1725minimizing their inventories, and we're now seeing how that1726affected jobs here in America, certainly. And there's interest1727in making sure we have fair markets, both domestically and1728internationally, but we can't lose focus of the effects of that1729on our domestic supply and security and America's interest, and1730it took that one pressure test in 2020 to see how vulnerable we1731are now.1732    So, one event can jeopardize our access to PPE, formula for1733infants, essential medicine, so imagine how important it is for1734American agriculture to prosper and be resilient so that we1735have a food supply that withstands foreign interference.1736Florida is a big part of that. Not many people think of1737agriculture when they think of Florida. They think of1738flamingos, beaches, weather, all kinds of things, but they1739don't think of agriculture, but it is truly the lifeblood of1740our Nation's agriculture. So much of the supply chain that goes1741to supporting growth in our farms comes from Florida. When it1742comes to phosphate and the natural resources we need to put1743food on the table, Florida leads the way, and truly Florida1744feeds the world in that sense.1745    It's in the best interest of American farmers in our State1746and our country to pursue a balanced approach. That is one that1747unleashes the full potential of American mineral production and1748American products that support agriculture and our food supply1749at the same time, ensuring we have a fair global market supply.1750There is no question that we must fortify our domestic food1751supply chain, and that starts with shoring up American products1752that are necessary to sustain a critical base of domestic food1753production. The industry that feeds us, that is life1754sustaining, is much bigger than any economic impact statistic,1755and we should take every step we can to make it more resilient.1756Securing the supply chain is a matter of national security, and1757if American agriculture stumbles, if fertilizer production is1758overburdened and neglected, our adversaries profit. We will1759become more and more reliant on those adversaries. I hope to1760avoid all conflicts. I think that should be every American's1761interest, but should a conflict occur, we will start weakened1762at the gate if we rely on our adversaries for food. We don't1763need the Art of the War to tell us that that is common sense.1764    I want to start with and ask a former national FFA1765president, which I have great respect for being from Plant City1766and from FFA, Mr. Rosenbusch. Thank you for being here. Is1767phosphate essential to growing food?1768    Mr. Rosenbusch. Well, thank you, Senator, for that1769question, and Plant City has had more national FFA officers1770than any other city in the United States, so congratulations on1771that.1772    Senator Moody. I didn't know that. You just taught me1773something.1774    Mr. Rosenbusch. Yes, you do.1775    Senator Moody. Go, Plant City.1776    Mr. Rosenbusch. Yes. Phosphate is one of the critical1777minerals. You cannot grow half the world's food on this planet1778without phosphate, and, of course, as you know, Florida is the1779center of that phosphate production, and we have tremendous1780opportunities in this country to expand if we can remove some1781of the regulatory burden around mining and manufacturing.1782    Senator Moody. And ahead of the United States in terms of1783natural reserves--China, Russia--so if, in fact, we do not1784support and ensure that we have domestic production, we will1785become more and more reliant on China and Russia. Is that1786correct?1787    Mr. Rosenbusch. Absolutely, and, Senator, China has1788restricted those exports, and they produce 40 percent of1789phosphates, which is one of the nutrients that's really1790challenging growers right now. And frankly speaking, one of the1791reasons they're doing so is to invest in lithium phosphate1792battery production, and so they definitely have policies that1793are impacting our growers here.1794    Chairman Grassley. Senator Welch.1795    Senator Moody. At the same time--if I might just finish1796this one question, Mr. Chairman----1797    Chairman Grassley. Yes.1798    Senator Moody. At the same time that we're making sure1799policies are supporting American growers and American products1800that support those growers, in order to keep input costs low1801for our farmers, we also have to ensure there's a fair global1802market. Is that correct?1803    Mr. Rosenbusch. Yes, Senator.1804    Senator Moody. All right. Thank you, sir.1805    Chairman Grassley. Thank you. Senator Welch.1806    Senator Welch. Thank you very much. I missed some of the1807testimony, but I have reviewed it and saw some of it. I just1808want to start with Mr. Coppess and Mr. Latham, and I also want1809to say to us, much of what the farm community is facing is a1810result of policies that have been allowed to take place by this1811Congress, and we all revere the hard work of our farmers, but1812we've got to do some work of our own and address these1813policies.1814    Both of you talked about the high input cost, and what I1815understand is that it used to be about 10 bucks a bushel a few1816years ago. It is now $11 or $12. The selling price used to be1817$13 or $14 a bushel, and it's now about 10 bucks a bushel. Is1818that right? So, you're losing money on every bushel, right? And1819of course you lost markets. We sold $12 billion to China. How1820many bushels of soybeans have you sold, either of you, to China1821this year?1822    Mr. Coppess. Well, when I drop it off, I'm not sure exactly1823where it's headed, but to my knowledge, we haven't sold very1824many.1825    Senator Welch. None.1826    Mr. Coppess. Right.1827    Senator Welch. The market is absolutely destroyed, and that1828is directly a result of the tariffs. So, you have more patience1829than I do about these tariffs, but this is killing these guys,1830and we've got to acknowledge that and get their markets back.1831There is discussion right now about taking some of that tariff1832money and sending it to farmers, and God knows I support1833getting some aid to farmers, but let me ask you this question.1834Do the soybean and corn farmers in Iowa, would they prefer to1835work hard and sell their product to a market or get a1836government handout?1837    Mr. Coppess. Thank you for the question. We don't want to1838live by the Government's hand. We're fine being the tip of the1839sword if we can correct the greater problems and have a better1840long-term future, okay?1841    Senator Welch. Okay, but the point----1842    Mr. Coppess. We're okay with that, but----1843    Senator Welch [continuing]. Is you want to be self-reliant.1844You want to sell. You want to produce. You want to work hard.1845You don't want a government handout, right?1846    Mr. Latham. Absolutely.1847    Mr. Coppess. We would like to have fair trade.1848    Senator Welch. Well, I am totally with you. You've got some1849supplemental income in your State on agricultural land. It's1850wind turbines, right? Those help the farmers?1851    Mr. Coppess. We have wind turbines in our State. It's a1852discussion amongst different landowners whether it's a positive1853or negative thing.1854    Senator Welch. Okay, but the farmer makes the decision. If1855we as a Congress take away the help for wind, that takes away1856some income for farmers. Is that correct or not?1857    Mr. Coppess. On the farmland that has wind turbines, that1858would be correct.1859    Senator Welch. Right, and, you know and what I know, we1860have dairy. That's our big farming in Vermont. Farmers are good1861at a lot of things, but one of the things they're astonishing1862at is fixing things. A headlight goes wrong on their tractor,1863they fix it, right? Something goes wrong, you don't have the1864right to repair your equipment and it costs a ton, and1865sometimes you lose production time because your tractor's down1866and you got to wait for the dealer to come out. I am1867introducing today a Right to Repair. So, if you buy a tractor--1868what do they cost, $250,000 now--you can fix it.1869    Mr. Latham. Or more.1870    Senator Welch. You can turn the screw, or do whatever it is1871or get the software you need. What's your view on Right to1872Repair?1873    Mr. Latham. Thank you for the question. The farmer needs an1874option to either repair himself or go to an independent repair1875shop if he doesn't have a relationship with his dealership.1876    Senator Welch. Well, I agree with that.1877    Mr. Coppess. We need that technology.1878    Senator Welch. And I want to tell you something. I just1879came from Vermont. Our farmers across the country--it's1880Vermont, it's Iowa--you guys all work hard, okay, and you have1881to face all kinds of things. They're completely beyond your1882control. The things we've been talking about here--the tariffs,1883the high input prices, the concentration, so you can't do seeds1884on your own--those are political decisions. Vermont right now1885is facing a crisis, our worst drought in 55 years, and our1886dairy farmers don't have the hay crop and the feed crop. You've1887got a lot of soybeans that are spilling over. Would you have1888any problem with USDA buying your soybeans to help us get1889through the winter and feed our animals in Vermont, one farmer1890helping another?1891    Mr. Latham. I would have no problem with that, Senator.1892    Senator Welch. In fact, you'd like it, right?1893    Mr. Latham. Right.1894    Senator Welch. You'd be selling----1895    Mr. Latham. Right.1896    Senator Welch. You'd be selling your surplus and helping1897our Vermont dairy farmers, who are just getting crushed by the1898drought that's really killed them. Well, I thank you about1899that. You know, we've got the phosphate, as you mentioned.1900That's everywhere. 14 percent increase in price in Vermont for1901our farmers. They have no control over that. We mostly import1902it from Canada. Is that an input cost that is also going up in1903Iowa?1904    Mr. Coppess. It is. On our farm, we've minimized the use of1905phosphate down to an absolute necessity where we have to have1906it.1907    Senator Welch. Right. Any----1908    Mr. Coppess. It's simply a negative return to----1909    Senator Welch. Any thoughts on what I understand is going1910to be the administration position that we should start1911importing cattle from Argentina? That going to help out?1912    Mr. Coppess. Thank you for the question. On my farm, we1913have 10 cows. It's a small part of our farm. What I can tell1914you is I'm not a fan of the Government dramatically changing1915the price of something we have. I've got a 16-year-old and a191614-year-old that are two cows each into starting their cow1917herd, and it's a tough day for them to realize the calves they1918have to sell to go buy more replacement heifers today are worth1919quite a bit less than they were 2 days ago when they're ready1920to go to market next week with them. So, that's a tough lesson,1921but there again, we're not a fan of the Government making those1922large swings for us.1923    Senator Welch. Well, I'm with you. Mr. Chairman, you are1924our best farmer on the Committee, probably in Congress. You are1925patient with the President and I respect you for that, but I1926just want to say that I don't know him like you do, but the1927tariffs are really hurting us in Vermont. My dairy farmers and1928this drought, which they don't complain about, it's just1929something they've got to deal with. We'd love to be able to get1930some of your surplus, a grain, to help our farmers who lost1931their crops. So, they can't control the weather, they can't1932control a lot of things, but we can control some policies1933that'll make it possible for another five generations to keep1934going. So, I really appreciate this hearing, and I appreciate1935your leadership on ag issues, Mr. Chairman. Thank you.1936    Chairman Grassley. Well, I hope you know, Senator Welch,1937I've consistently expressed my views to the President's Cabinet1938about the impact of tariffs. I hear that all the time from1939Iowans, farmers and non-farmers alike, and I've expressed my1940views to them a bit.1941    I'm going continue to ask questions. I don't think1942anybody's coming back, and just as soon as I get called for1943this last vote, this will be the end of the meeting, unless1944somebody comes in that didn't get a first round. So, I'm going1945to ask Mr. Latham, across corn and soybeans today, are there1946still contractual or technical barriers that keep you from1947offering a seed where the competitor's trait stacked alongside1948another? Could you describe the specific clauses and data1949obligations?1950    Mr. Latham. Yes. Thank you, Senator, for the question. Yes,1951there are restrictive rebates that we fall under as an1952independent seed company, and it happens a lot to farmers as1953well. But if we use an alternative and if we fall below, let's1954say it's usually 85 or 90 percent, and we could fall off,1955basically, a cliff and could lose our whole profitability for1956the year.1957    Chairman Grassley. And, Mr. Coppess, farmers report rebate1958clawbacks, delayed allocations, and audit threats after trying1959rival products and services. Could you give us some details of1960the recent incidence where a supplier or retailer used rebate1961leverage or allocation delays to punish switching?1962    Mr. Coppess. Thank you for the question, Senator.1963Oftentimes, our pricing structure on our farm is the more we1964buy, the cheaper it gets. I haven't personally experienced a1965rebate clawback, but it is very clear when we're purchasing1966products, that the more we buy, the cheaper the product gets,1967driving us down into, you know, we need to try and stack that1968to stay profitable limits our options.1969    Chairman Grassley. Mr. LaVigne, your organization says on1970its website that your membership includes 85 percent of all1971private U.S. seed companies operating in the United States,1972both big and small. Is there a disagreement among your members1973regarding antitrust and intellectual property issues, laws, and1974enforcement?1975    Mr. LaVigne. Thank you for that question, Mr. Chairman.1976We're pretty consistent with respect to intellectual property1977laws. It's a key pillar for our strategic plan, and it feels1978like that's where our companies make investments as technology1979continues to improve and we bring more products to farmers. We1980also believe very strongly that our members have their own1981strategies for how they implement intellectual property1982practices. We don't judge those by the companies. That's not1983our position as an association. So, whether they choose1984patents, or PVPs, or licensing, or just trade secrets, those1985are all tools that all innovators in the U.S. have available to1986them.1987    Chairman Grassley. Yes. This question would be to Moss,1988Rosenbusch, and LaVigne. Only 1 of the 4 largest companies1989controlling the ag market is U.S. owned. In your opinion, does1990this represent any national security risk to our country?1991    Dr. Moss. Thank you, Chairman. I'm happy to chime in on1992that. Having a concentrated market with just a few firms1993operating in that market, or a dominant firm, absolutely1994represents national security risks. Especially in food and1995agriculture, we've talked about market power bottlenecks where1996producers and consumers are at the behest of a very powerful1997company in terms of prices paid for commodities and prices paid1998for food. So, we have to be extra vigilant in food and1999agriculture to enforce our antitrust laws to ensure that we2000have competitive markets and the ability for smaller innovative2001entrants to get in and to have a go of it.2002    Chairman Grassley. Yes. If you want to add to that or2003express your own view, I invite the two of you to do that as2004well.2005    Mr. LaVigne. Thank you again, Mr. Chairman. When we look at2006this, we obviously have antitrust respect for the U.S. laws and2007for our own antitrust policies with the association, so we2008don't have a position with respect to how contracts are done or2009pricing is done, anything along those lines. From the member2010standpoint, we want very strong intellectual property rights.2011We know that the American market is one of the most competitive2012in the United States, and we would like to continue that2013process. This is where the innovation in our industry is done,2014and that's why we're the leaders globally. So, we would like to2015continue that as we go forward, and, hopefully, that2016competition continues to stay strong.2017    Chairman Grassley. Do you have anything to add, Mr.2018Rosenbusch?2019    Mr. Rosenbusch. Thank you, Chairman Grassley. I would just2020say that on the fertilizer side, most of the U.S. producers are2021U.S. owned.2022    Chairman Grassley. Okay. For you, Mr. Rosenbusch, when a2023single foreign supplier dominates an essential input, and2024commerce and ITC-imposed duties that may choke off that source,2025what specific safeguards would the Fertilizer Institute support2026to prevent a de facto domestic monopoly and keep farmers2027supplied?2028    Mr. Rosenbusch. Thank you, Chairman Grassley, for that2029question. The trade cases that you're referring to, they are2030complex and have been adjudicated through the International2031Trade Commission. At the Fertilizer Institute, we have both of2032those members on both sides of that case, so a wise man once2033told me, when you have two members on both sides of the issue,2034go with the member, and so we don't have an official policy on2035any of those trade remedy cases. I will tell you that there2036were many factors when that case came forward in 2020 that2037impacted the market and impacted the supply. A lot of those2038tons ended up being filled by Saudi Arabia and other countries.2039    Chairman Grassley. We have some statements here from people2040that want to get into the record, statements and letters from2041several groups, including the Iowa Corn Growers Association. I2042am going to ask unanimous consent that those statements be put2043in, and there's nobody here to object.2044    [Laughter.]2045    [The information appears as submissions for the record.]2046    Chairman Grassley. Dr. Moss, in plain English, where's the2047line between licensing that speeds innovation and licensing2048that walls off rivals, especially for stacked traits? Do you2049support narrowly tailored measures similar to the fair,2050reasonable, and nondiscriminatory agreements? If so, why?2051    Dr. Moss. Thank you, Chairman Grassley. So, I think two2052things quickly in response to that question. Antitrust does a2053very difficult dance with intellectual property law. Our2054intellectual property laws are extremely important for spurring2055incentives to engage in R&D and to innovate products. But as2056we've seen in the pharmaceutical industry, there can absolutely2057be trouble ahead when firms use intellectual property rights to2058shape or to control how competition develops. We've seen that2059with product topping and generic seeds where generics have been2060kept out because of small changes in patents and another 202061years of patent protection. So, that's the first answer. The2062second is, if we do get into the business of standard-setting2063organizations where the large biotech companies will be needing2064to figure out what the standards are, it will be a very complex2065and difficult process, given how much trait stacking there is.2066And determining what is a fair price for a license, of course,2067would be even more complex, and that will require a good deal2068of government oversight, and I would expect it would generate2069an enormous amount of controversy.2070    Chairman Grassley. My last question will be to Mr. LaVigne2071and Dr. Moss. I want to understand why generic, insect-2072resistant traits haven't materialized despite patent2073expiration. I understand that there does not appear to be a2074single generic insect-resistant trait available to growers,2075notwithstanding frameworks touted as solutions. Why is this the2076case?2077    Dr. Moss. My first response would be, again, the ag-biotech2078industry has borrowed a page from pharmaceuticals, filing for2079new patents based on very minor modifications, which then locks2080in another 20 years of patent protection and the ability to2081charge monopoly prices. The FTC currently has a case looking2082into loyalty discounts in pesticides. That is another way to2083lock farmers into cropping systems and limit the ability of2084farmers to switch. Lack of interoperability exacerbates this2085problem. So, we are nowhere near on top of these types of2086abuses of intellectual property that are really designed to2087stifle and to control competition.2088    Chairman Grassley. Mr. LaVigne.2089    Mr. LaVigne. Thank you, Mr. Chairman, and as we look at it,2090just to reiterate, we're not in the practice of collecting what2091the practices of the members are or how they license or charge2092fees. It's against American antitrust law, so I will make2093comment from the respect that we support products coming to2094market. This is much more difficult than other chemicals or2095pharmaceuticals or things along those lines that come to the2096marketplace after that expiration. You're looking at a lot of2097products where it may be the BT product, but you're also2098looking for stacks of other products with that. And then also2099newer varieties as they come along, is somebody going to want2100to stack that on a 20-year-old variety that's off patent, or do2101they want a new variety that is more resistant and has disease2102resistance in it? So, the plant-breeding process and the track-2103development process is an evolving process as we go along, and2104it's not just static. We're not planting the same seed2105varieties we did 20 years ago. We're trying to bring that2106newest product to the farmer. The asset has been involved in2107driving the ag accord to try to give that platform for generics2108coming to the marketplace, but it's been a challenge, and it's2109one that we need to continue to work with Congress and work2110with the administration, EPA, and USDA to try to provide that2111pathway for companies that choose to go to the generic traits2112and varieties.2113    Chairman Grassley. Before I adjourn, I thank all of you for2114your contribution to this debate, and if you got anything you2115didn't get a chance to say, we'll take it in writing.2116    Senator Durbin and I, as well as the entire Committee,2117would like to thank each witness for taking the time to share2118their knowledge and expertise.2119    Written questions can be submitted for the record for 12120week from today, and I'll ask the witnesses to answer and2121return the questions to the Committee within 2 weeks after you2122receive them.2123    Chairman Grassley. Thank you very much. Meeting adjourned.2124    [Whereupon, at 12:20 p.m., the hearing was adjourned.]2125    [Additional material submitted for the record follows.]21262127[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]21282129                            A P P E N D I X21302131The following submissions are available at:21322133  https://www.govinfo.gov/content/pkg/CHRG-119shrg62935/pdf/CHRG-119shrg2134    62935-add1.pdf21352136Submitted by Chairman Grassley:21372138 ACT | The App Association, letter................................     221392140 INARI, statement.................................................     621412142 Mueller, Mark, statement.........................................     821432144                                 [all]