IEEPA Fertilizer Tariffs Generated Modest Revenue but Imposed Outsized Costs on U.S. Farmers
NDSU analysis finds tariff pass-through exceeded 100%, with supply disruptions and price stickiness amplifying the burden beyond headline tariff levels
The January 2026 NDSU Agricultural Trade Monitor examines the effects of International Emergency Economic Powers Act (IEEPA) tariffs on agricultural inputs — especially fertilizers — during 2025, concluding that while tariff revenues were relatively small, the economic costs to U.S. farmers were significantly larger due to market disruption and excess price pass-through.
Key findings:
- Nearly $1 billion in ag-input tariff revenue, but fertilizers a small share.
NDSU estimates IEEPA tariffs collected about $958 million from agricultural inputs between February and October 2025. Fertilizers accounted for roughly $110 million, compared with $530 million from farm machinery and $273 million from ag chemicals. Fertilizer tariff revenue represented less than 1% of total U.S. fertilizer expenditures, underscoring the modest fiscal scale relative to farm input costs.
- Nitrogen bore most fertilizer tariff exposure.
Of fertilizer-related collections, nitrogen products generated about $76 million, while phosphate fertilizers accounted for roughly $32 million and potash was largely unaffected due to exemptions and sourcing from Canada.
- Trade diversion and import contraction followed tariff implementation.
Importers front-loaded fertilizer purchases ahead of April 2025 tariffs and shifted sourcing toward exempt countries such as Mexico and Russia. Even so, overall imports of DAP and MAP fell sharply — well below recent averages — as exporters redirected supplies to other markets.
- Tariff pass-through exceeded the tariff itself.
During peak months, fertilizer prices paid by U.S. buyers rose by more than the effective tariff rate. For DAP, NDSU estimates spot-market pass-through of roughly 340% relative to the tariff, with retail pass-through still exceeding 150% — evidence that uncertainty and supply-chain disruptions magnified price impacts beyond the direct duty.
- November rollback eased wholesale prices, but retail relief lagged.
After fertilizer exemptions were granted in November 2025, U.S./Canada wholesale price differentials narrowed quickly, reversing most tariff-driven increases. Retail prices, however, adjusted more slowly, leaving farmers in early 2026 still paying elevated prices relative to pre-tariff baselines.
- Other trade dynamics remained stable.
Despite very low Mississippi River levels in 2025, barge traffic and basis levels showed limited disruption. Meanwhile, China remained on pace to meet soybean purchase commitments — even as U.S. soybeans traded at a premium to Brazilian supplies — suggesting strategic rather than price-driven buying.
Bottom Line: The NDSU report concludes that IEEPA fertilizer tariffs raised relatively little revenue but imposed disproportionate costs on U.S. agriculture. Price volatility, excess pass-through, and slow retail adjustment meant that farmers bore economic burdens substantially larger than the tariff receipts themselves, highlighting the risk of using emergency tariff authorities for broadly traded farm inputs.
