    [Senate Hearing 119-307]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 119-307

                      PRESSURE COOKER: COMPETITION ISSUES
                     IN THE SEED AND FERTILIZER INDUSTRIES

    =======================================================================

                                    HEARING

                                   before the

                           COMMITTEE ON THE JUDICIARY
                              UNITED STATES SENATE

                        ONE HUNDRED NINETEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                OCTOBER 28, 2025
                                   __________

                              Serial No. J-119-45

                                   __________

             Printed for the use of the Committee on the Judiciary

                    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                            www.judiciary.senate.gov
                                www.govinfo.gov

                                   ______

                     U.S. GOVERNMENT PUBLISHING OFFICE

    62-935                    WASHINGTON : 2026

                           COMMITTEE ON THE JUDICIARY

                      CHARLES E. GRASSLEY, Iowa, Chairman

    LINDSEY O. GRAHAM, South Carolina    RICHARD J. DURBIN, Illinois,
    JOHN CORNYN, Texas                       Ranking Member
    MICHAEL S. LEE, Utah                 SHELDON WHITEHOUSE, Rhode Island
    TED CRUZ, Texas                      AMY KLOBUCHAR, Minnesota
    JOSH HAWLEY, Missouri                CHRISTOPHER A. COONS, Delaware
    THOM TILLIS, North Carolina          RICHARD BLUMENTHAL, Connecticut
    JOHN KENNEDY, Louisiana              MAZIE K. HIRONO, Hawaii
    MARSHA BLACKBURN, Tennessee          CORY A. BOOKER, New Jersey
    ERIC SCHMITT, Missouri               ALEX PADILLA, California
    KATIE BOYD BRITT, Alabama            PETER WELCH, Vermont
    ASHLEY MOODY, Florida                ADAM B. SCHIFF, California

                 Kolan Davis, Chief Counsel and Staff Director
             Joe Zogby, Democratic Chief Counsel and Staff Director

                                C O N T E N T S

                                  ----------

                               OPENING STATEMENTS

                                                                       Page

    Grassley, Hon. Charles E.........................................     1
    Durbin, Hon. Richard J...........................................     3
    Lee, Hon. Michael S..............................................     4
    Booker, Hon. Cory A..............................................     6

                                   WITNESSES

    Coppess, Noah....................................................     9
        Prepared statement...........................................    37
        Responses to written questions...............................    86
    Latham, John.....................................................    11
        Prepared statement...........................................    41
        Responses to written questions...............................    91
    LaVigne, Andrew..................................................    15
        Prepared statement...........................................    45
        Responses to written questions...............................   101
    Moss, Diana......................................................    17
        Prepared statement...........................................    49
        Responses to written questions...............................   107
    Ragland, Caleb...................................................    12
        Prepared statement...........................................    58
        Responses to written questions...............................   111
    Rosenbusch, Corey................................................    13
        Prepared statement...........................................    68
        Responses to written questions...............................   117

                                    APPENDIX

    Items submitted for the record...................................   123

                      PRESSURE COOKER: COMPETITION ISSUES
                     IN THE SEED AND FERTILIZER INDUSTRIES

                                  ----------

                           TUESDAY, OCTOBER 28, 2025

                                  United States Senate,
                                    Committee on the Judiciary,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 10:17 a.m., in
    Room SH-106, Hart Senate Office Building, Hon. Charles E.
    Grassley, Chairman of the Committee, presiding.
        Present: Senators Grassley [presiding], Cornyn, Lee,
    Hawley, Britt, Moody, Durbin, Klobuchar, Blumenthal, Booker,
    and Welch.

            OPENING STATEMENT OF HON. CHARLES E. GRASSLEY,
                 A U.S. SENATOR FROM THE STATE OF IOWA

        Chairman Grassley. This is kind of the order of business
    for today. I'll have an opening statement, Senator Durbin will
    have an opening statement, then we have the Chairman and
    Ranking Member of the Subcommittees to make an opening
    statement--that's the Antitrust Subcommittee--and then we'll
    introduce and swear in the witnesses and take the testimony.
        Today, the Judiciary Committee turns its attention to the
    problem Iowa farmers talked to me about at the kitchen table
    and at the local co-op. This time of the year, farmers are
    buying the basics they need to plant and harvest a crop. These
    farmers don't feel like they have a real choice, let alone a
    fair price. America's farmers are the most productive in the
    world. They take the risk, put in the work, and feed the United
    States and much of the world, but they also operate on thin
    profit margins, if they have a profit. If input costs go up or
    switching suppliers is too hard, that pinch is felt by every
    farmer, family, and consumer in the world.
        Farmers across the country are shouldering significant
    higher input costs, particularly for seed and fertilizer.
    According to the USDA's agricultural price reports, the price
    indexes farmers pay for these categories were notably higher in
    January 2025 than at the start of 2021. This was obviously due
    in part to the record high inflation that took place during the
    last 4 years. Rising input prices squeeze already thin margins,
    especially when combined with volatile commodity markets,
    higher borrowing costs, and weather risk. Today's hearing will
    examine the drivers behind these trends: energy markets that
    influence nitrogen production, global supply disruptions,
    logistic bottlenecks, and market concentration. This hearing
    will evaluate practical steps that increase transparency and
    competition so processors and producers can remain viable and
    resilient. One such step would be to pass my legislation, the
    Fertilizer Research Act. The bill would require Department of
    Agriculture to do a comprehensive study on fertilizer industry
    to shed light on the reason farmers are paying so much for
    fertilizer. The Department would be required to give
    recommendations and do regular reporting to the public.
        This hearing is focused on competition issues. However,
    there is something that the Trump administration can do right
    now to help ease the burden for farmers: lowering the
    countervailing duties on phosphate from Morocco. In 2024, the
    Biden administration increased the duties on Moroccan phosphate
    to 18 percent. The Biden phosphate duties have only hurt
    farmers by boxing out access to this important market on an
    essential input with no substitute. I'm calling on the Trump
    administration to help American farmers and get rid of that
    phosphate duty.
        Over the last 20 years, a few big companies have bought up
    many of the smaller seed and chemical businesses. Those same
    companies now sell not just the seeds, but also the pesticides
    and digital farming tools that tell farmers what to plant and
    when. Because all these products and data systems are tied
    together, it's hard for farmers to switch to a different brand.
    Their data and recommendations are locked in to one company's
    system. On the fertilizer side, global energy and trade shocks
    hit prices fast. Regional markets, those prices can be slow to
    fall. On top of that are the contracts and dealer practices,
    like loyalty rebates, most-favored clauses, and early order
    calendars, that can lock in a farm or a local retailer even
    when there's better options on paper.
        Now, nobody here wants to punish innovation. We want better
    yields, healthier soils, quality products, and we've been
    vastly improving in that area for the last 40 years, but we
    also want competition that's fair, transparent, and local
    competition that a farmer can actually express when he or she
    sits down to make a purchase. Competition law is about making
    sure the rules don't give a few players the power to decide
    what everyone else pays and which choices are even available.
        This hearing focuses on problems and workable solutions.
    First, transparency: farmers deserve to know the effective
    price that they're paying, including how rebates and clawbacks
    really work, and whether wholesale fertilizer declines are
    being passed through in a timely way. Second, portability:
    farmers ought to control their own data and move it quickly,
    completely, and affordably so they can seek independent
    agronomic advice without fear of losing their history. Third,
    fair dealing: contracts and dealer programs shouldn't operate
    as a de facto exclusive arrangement in rural counties where
    there might only be one or two full-service outlets. And
    fourth, accountability: when mergers don't deliver what was
    promised on paper, agencies should look back and fix it. I
    represent Iowa, so I'm thinking about anhydrous ammonia
    logistics, early season timing, and the reality that a lost
    multiline dealer can mean a long drive and fewer options. But
    these issues cross State lines, and the principles are the same
    whether you farm in Iowa, Illinois, or anywhere else. More
    sunlight, more choice, less fine print, level playing fields.
        I appreciate Senator Durbin's partnership in setting this
    constructive, bipartisan tone today. We'll hear from farmers,
    producers, and industry experts. My goal is pretty simple:
    identify practical steps, legislative and regulatory, that
    respect innovation and property rights, but restore real, on-
    the-ground competition. We're also joined today by Gail Slater,
    the assistant attorney general for antitrust at the Department
    of Justice. Her presence is a strong showing of good faith and
    continued collaboration on ag antitrust issues that I hope to
    have with her and have had already. When farmers win fair
    choices at fair prices, the rural communities win, consumers
    win and American food security wins. I look forward to the
    discussion and now turn to Senator Durbin.

             OPENING STATEMENT OF HON. RICHARD J. DURBIN,
                A U.S. SENATOR FROM THE STATE OFILLINOIS

        Senator Durbin. Thanks, Senator Grassley. We are of
    different political faith, but we are friends and we have many
    issues in common, particularly as they relate to agriculture. I
    concede--reluctantly, but concede--that Iowa is the number one
    producer of corn among States----
        [Laughter.]
        Senator Durbin [continuing]. And add quickly, Illinois is
    first in soybeans. We have one category where I think we are
    comfortably ahead of Iowa and I want it noted this week, and
    that's in the area of pumpkins, so we are proud of that fact. I
    thank you for this hearing.
        I think we need to take a look at the overall state of the
    farm economy as we address this particular challenge today.
    More than 50 years ago, in 1973, the U.S. economy was in
    turmoil. Inflation and the cost of living were up, food prices
    were high, and American families were angry. At the same time,
    there was a global shortage of livestock feed, causing the
    price of soybeans to spike. President Nixon, in an effort to
    stem inflation, stopped all U.S. soybean exports, including
    those headed to Japan, then our biggest customer. This
    interruption lasted about 3 months, but for Japan, it was the
    last straw. The Japanese wanted a more reliable soybean
    supplier, so they found a handful of small soybean farms in
    Brazil and started investing. Today, Brazil is the second
    largest soybean producer in the world and the biggest
    competitor to Illinois soybean farmers. All it took was one
    Presidential misstep and 3 months of trade uncertainty. Three
    months.
        Sadly, President Trump is not a student of history. His
    tariffs on China, even as they change from one week to the
    next, are bad news for Illinois farmers and good news for
    Brazilian farmers, who've seen their sales of soybeans to China
    increase by $2 billion this year. Tariffs are also good news
    for Argentina, which has sold $708 million more in soybeans to
    China this year, yet President Trump is propping up Argentina's
    government with a $40 billion lifeline when American farmers
    are struggling to stay in business. The President is in Asia
    for trade discussions with China. I hope that they will be
    positive, but China is now investing heavily in South American
    farming, even building mega ports there to manage massive
    shipments of soybeans, corn, and sugar. It is a replay of what
    we saw with Japan and Brazil in the 1970's, and China is
    playing the long game at the expense of American farmers.
        Illinois farmers are concerned about the increasing cost of
    doing business, especially the cost of seed, fertilizer, and
    equipment. One problem is that there are just three--pardon
    me--just a few big companies in these sectors where market
    concentration reduces competition. The Committee has examined
    these dynamics in other parts of the food industry, such as
    meat packing and groceries. It's a complex issue, which is why
    I joined Chairman Grassley back in April to question why the
    Department of Justice plan to close its Chicago field office
    that specializes in agriculture antitrust issues. The
    administration has not provided a response.
        Farmers need policy certainty from Washington, but these
    past 10 months, that's not what we've given them. The Chairman
    and I co-sponsored a bill to allow for year-round E15 ethanol
    sales. It almost passed Congress until Donald Trump and Elon
    Musk stopped it and opposed the bill. Farmers also face severe
    workforce shortages. Seventy percent of farm workers in the
    United States are foreign born, but the way this administration
    targeted immigrant farm workers is another sign of how this
    administration values farmers. USDA has forced out more than
    15,000 employees since January, and farmers are seeing
    widespread delay in services as a result.
        My farmers--all farmers--need help, but no amount of
    financial relief can replace lost markets, especially if relief
    payments simply go from farmers straight to the handful of
    seed, fertilizer, and equipment companies. Big companies say
    their size helps them compete and survive while providing
    consumers with a consistent, reliable product. Farmers
    disagree, saying feed, seed, and fertilizer are not affordable,
    come with strict contracts and requirements that prevent
    farmers from exploring the alternatives, pressure tactics that
    keep farmers trapped as customers, and zero transparency on how
    personal farming data gets collected and sent to who knows
    where for who knows what.
        This month, the Nobel Prize for Economics was awarded to
    three economists who believe that economic growth happens when
    conditions exist that allow new innovation and technology to
    rise up to replace old ones. Today's witnesses will report on
    whether that is actually happening. Thank you, Mr. Chairman.
        Senator Grassley. Chairman Grassley. Before I call on
    Senator Lee, Chairman of the Subcommittee, and Senator Booker,
    the Ranking Member, I think we all saw the TV reports over the
    weekend that Secretary Bessent feels that he's making progress
    with the Chinese counterparts, and I suppose, to some extent,
    that comes from the fact that the President has used tariffs as
    a carrot and stick to make progress in this area, but we hope
    that when President Trump gets done with his meeting with
    President Xi this weekend that we have good reports on soybeans
    going to China. Senator Lee.

               OPENING STATEMENT OF HON. MICHAEL S. LEE,
                 A U.S. SENATOR FROM THE STATE OF UTAH

        Senator Lee. Thank you, Chairman Grassley and Ranking
    Member Durbin, for holding this important hearing on
    competition in American agriculture.
        Agriculture is, of course, one of our greatest strengths as
    a country. Our farmers work hard to produce nutritious food,
    not just for families here at home, but to feed hungry people
    around the world. And yet today, farmers are facing mounting
    pressure from market consolidation that's been squeezing them
    from both sides, creating a bottleneck. The companies that
    farmers buy from keep raising prices on some of the essential
    supplies they have to have in order to produce their
    commodities. At the same time, buyers that farmers try to sell
    to continue to negotiate down, and they're negotiating down
    what they'll pay for crops and for livestock. Farmers are
    caught in the middle, very often watching their margins shrink
    year after year.
        Market consolidation has, of course, raised some additional
    concerns. Just two companies now control about 90 percent of
    corn seed genetics. Four firms produce roughly 75 percent of
    the nitrogen fertilizer used in this country. In cattle, four
    meat packers handle about 85 percent of fed cattle slaughter
    capacity in America. Consolidation's impacts are felt not just
    on the farm, but all the way to the grocery store where
    consumers face fewer choices and, fairly consistently, higher
    prices at the same time. In addition to consolidation,
    sometimes regulations add to the problem, even when this is
    unintended as it sometimes is. Federal regulations often impose
    compliance costs that small operators simply can't shoulder.
    What often may start as safety measures can become barriers
    that keep new competitors out of the market altogether. They
    serve as a sort of moat an anticompetitive moat around the
    industry, and they can exclude people from becoming competitors
    who might otherwise reach that status.
        Now, this is why I've been an original co-sponsor of the
    Processing Revival and Intrastate Meat Market Exemption Act,
    also known as the PRIME Act. This bill takes a commonsense
    approach. It would let States set their own inspection
    standards for meat that's processed and sold entirely within a
    single State's boundaries. The Constitution, properly
    understood and understood based on its text and based on its
    original public meaning at the time of its adoption, simply
    does not support the proposition that Federal regulatory
    authority should extend to commerce as to products that never
    cross State lines to begin with. By removing this onerous
    Federal regulatory footprint and allowing States to play their
    role where it's appropriate for States to play, we could help
    small processors compete far more effectively. More processors
    would mean farmers would have more options as to where they
    could sell their products, which would strengthen local
    economies and build resilient food systems.
        We also need strong enforcement efforts to address some of
    our competition issues. President Trump's Agricultural
    Competition Task Force is a joint effort between the U.S.
    Department of Justice Antitrust Division and the U.S.
    Department of Agriculture. It's an effort that brings together
    DOJ's enforcement authority and USDA's deep knowledge of
    agricultural markets. It's a comprehensive approach designed to
    root out anticompetitive behavior.
        The Task Force is tackling these problems head on. DOJ is
    investigating price-fixing schemes and allegations of
    collusion. They're taking a fresh look at past mergers to see
    how they may have impacted the state of competition. They're
    examining whether dominant firms are sharing information in
    ways that let them illegally coordinate their actions. The Task
    Force is also going after predatory pricing where dominant
    corporations deliberately sell at prices below cost to drive
    smaller rivals out of business so that they can then seize a
    dominant position and, of course, addressing patent abuses that
    stifle innovation and keep new competitors locked out.
        The Task Force also recognizes that we need to address the
    structural problems that created these issues in the first
    place. Take the cost squeeze farmers face every planting
    season. When essential inputs, such as seed and fertilizer,
    become more expensive, farmers' profit margins inevitably
    shrink. These costs stay high because of limited competition,
    and when farmers face these market conditions, we're not just
    looking at an agricultural problem, we're looking at a broader
    threat that reaches across the economy and into our Nation's
    food security, something that we pay a lot of attention to in
    this town.
        Competitive markets are essential infrastructure, you might
    say, within our economy. When competition works, innovation
    flourishes because new ideas can break through because they
    have every incentive to do so. Consumers benefit from better
    products at fairer prices, rural communities prosper because
    farmers can earn a decent living, but when competition breaks
    down, we tend to see the opposite of that. Costs climb while
    innovation stalls. Farmers and ranchers look at those shrinking
    markets and wonder if the next generation will have any future
    in farming at all, and we can't let that happen.
        Agricultural markets are not exempt from the rule of law,
    certainly not exempt from our antitrust statutes. Farmers,
    ranchers, and American consumers deserve markets where success
    comes from innovation, efficiency, and hard work, not from
    consolidation or collusion. I look forward to hearing from our
    witnesses today and doing all this with an eye toward keeping
    American agriculture strong for generations to come. In order
    to do that, we all understand that we need robust competition.
    Thank you, Mr. Chairman.
        Chairman Grassley [off mic]. Now to the distinguished
    Ranking Member of the Subcommittee on Antitrust, Competition
    Policy, and Consumer Rights, Senator Booker.

               OPENING STATEMENT OF HON. CORY A. BOOKER,
              A U.S. SENATOR FROM THE STATE OF NEW JERSEY

        Senator Booker. Mr. Chairman, I'm grateful for you and the
    Ranking Member for organizing what I think is a vitally
    important hearing. I want to thank Senator Mike Lee. He and I
    have a whole bunch of overlap, a wide swath of agreement of the
    urgency of these issues, and a lot of common ideas about what
    we need to do about them.
        I want to just start by saying something that doesn't
    really need to be said because it's happening all over this
    country, but American farmers are in crisis. Farms in New
    Jersey and across our country are facing unprecedented
    conditions, and we're seeing a loss of American family farmers
    in a way that could be described as an extinction-level event.
    These are incredible Americans who scratch from the soil the
    food that feeds our families and makes us competitive globally,
    but year after year, they have seen the cost of seed,
    fertilizer, fuel, and land go up while the prices for their
    crops barely budge. And we're going to hear testimony today
    about the serious financial challenges facing our soybean
    farmers really created by the Trump administration's chaotic
    trade policies, and I want folks to hear that because, again,
    I've gone across this country in multiple States and met with
    soybean farmers and seen their true fealty to this Nation and
    their mission.
        But while soybean farmers are struggling, unnecessarily so,
    we need to also remember that many other farmers, including
    farmers growing fruits and vegetables, are also struggling and
    in need of assistance from Congress. They need action from this
    body. They need not us to only rightfully point out the
    problems, but come up with solutions because our food system
    today suffers from, as my colleague, Mike Lee, was saying,
    hyper concentration. A handful of mega corporations now
    dominate every step of the supply chain, and that begins with
    seeds. The seed March market, which used to include hundreds of
    small, regionally based seed companies, is now controlled by
    just a few powerful global corporations: Bayer, Corteva,
    Syngenta. Through mergers and acquisitions and aggressive
    patent practices, these firms have driven out nearly all the
    smaller competitors. As a result, these three companies can
    dictate what seeds are available, what traits they carry, and,
    ultimately, what crops farmers grow.
        Seeds aren't just another input. They are unique because
    they are living organisms, the foundation of our food system,
    which used to be controlled and dictated by great Americans--
    individual farmers who know their soil, who are stewards of the
    land--but you have to have good seeds to grow, and they know
    that. For thousands of years, these stewards of our lands,
    these great Americans, saved seeds from one harvest to the next
    and fed America, but in recent decades, this fundamental right
    of farmers to save seeds has literally been stolen from them by
    corporate greed. Monsanto, now Bayer, locked up seeds with
    sweeping utility patents and sued our American farmers for
    doing what they had always done. Saving and replanting the
    progeny of seeds that they planted, that their parents planted,
    that their grandparents planted. Since the 1990's, companies
    have engineered genetically modified seeds with desirable
    traits, like herbicide tolerance or insect resistance. These
    patented seeds are bundled with their own pesticides by
    corporations so farmers are forced to buy the whole package.
    This traps farmers in an expensive system they may not want or
    even need.
        Last November, I sent a letter to the EPA urging them to
    deny the pending re-approval for the pesticide, dicamba.
    Dicamba is notorious for drifting and damaging neighboring
    farms with crops that aren't engineered to withstand it. This
    creates an inescapable lose-lose for our American farmers,
    either by dicamba-resistant seeds or risk your crops being
    destroyed by pesticide drift. It forces farmers into seed
    pesticide bundles and expands corporate control. That's not
    real choice. That's not a free market. It's coercion through
    chemistry.
        Choice is disappearing across our farm economy. It is anti-
    free market, and our public research institutions, who have the
    tools to innovate, are steered to serve Bayer and Corteva's
    interests. These corporations not only control research
    funding, but distribution, blocking independent seeds from
    reaching the market. The result: fewer varieties, weaker
    resilience, and lost opportunities to adapt to a rapidly
    changing climate. This is corporate capture of the very first
    link in our food chain, and when you control the seed, you have
    unjust control over farmers, and, ultimately, you control the
    food.
        We are America, the home of the brave and the land of the
    free, but freedom is being stolen by this corporate
    concentration, and it's not just farmers that are hurting
    because of this broken, corrupt system. Consumers also pay the
    price. We must do better. We must restore competition and
    fairness in this system because I know American farmers. Give
    them a fair playing field and they can compete, and they can
    compete with the world, and when our farmers compete, all of
    America wins. So, this means enforcing our antitrust laws and
    placing a moratorium on any new Big Ag mergers. It means
    protecting farmers' rights to save seeds and choose inputs
    based on need. It means continuing the ban on dicamba and
    investing in public research that serves the public interest,
    public research that serves farmers and not corporations. This
    is a moment of urgency. If we do not act now, we will reach a
    point where so many farmers are driven off the land that they
    have been on for generation after generation, land their
    grandfathers and great grandfathers and mothers cleared with
    their own bare hands. What's happening in America is dire.
    Congress must not just talk about the problems. We've got to
    fix them, or American farming as we know it will be forever
    changed.
        I look forward to hearing from the witnesses. Thank you,
    Chairman.
        Chairman Grassley. Thank you, Senator Booker. Now I'll
    introduce the witnesses.
        Noah Coppess is an Iowa farmer. He co-owns Coppess Family
    Farms, Cedar County. He also co-owns Lincoln Way Ag Services, a
    grain-hauling custom pesticide application business. He holds
    an associate degree in applied sciences and agricultural
    mechanization from Kirkwood College. We also have John Latham,
    another fellow Iowan. Mr. Latham is president of Latham Hi-Tech
    Seeds, a company his grandparents founded in 1947. To this day,
    Latham Seed offers corn, soybean, alfalfa cover crop products.
    Mr. Latham holds a Bachelor of Science degree in agriculture
    business from Iowa State University.
        Mr. Caleb Ragland is president of the American Soybean
    Association. He leads also the Kentucky Livestock Coalition.
    Caleb and his wife co-own Magnolia Green and Stock Farm where
    they raise soybeans, corn, and winter wheat. Mr. Ragland holds
    a bachelor's degree in business management and economic finance
    from Bryan College. Mr. Corey Rosenbusch, president and CEO of
    The Fertilizer Institute. Mr. Rosenbusch previously led the
    Global Cold Chain Alliance and worked in Indonesia on the USDA-
    sponsored Agricultural Development Initiative through the
    Borlaug Institute. Mr. Rosenbusch holds a degree in
    international development from Harvard and a Bachelor of
    Science degree in agricultural education from Texas A&M.
        Lastly, or not lastly. Andy LaVigne is president and CEO of
    the American Seed Trade Association, which represents companies
    involved in plant breeding, seed production, distribution, and
    related industries. Mr. LaVigne holds a Bachelor of Arts degree
    in political science with a minor in economics from the
    University of Florida. Last, we're joined by Dr. Diana Moss,
    who serves as vice president and director of competition policy
    at the Progressive Policy Institute. Her work includes studying
    antitrust enforcement and sector regulation, including
    agriculture. She previously served and led the American
    Antitrust Institute and served at the Federal Energy Regulatory
    Commission. She has a master's degree from the University of
    Denver and a Ph.D. from Colorado School of Mines.
        I thank you all for appearing. Now I would ask you stand,
    and I will swear you in.
        [Witnesses are sworn in.]
        Chairman Grassley. They all answered affirmatively. Mr.
    Coppess, will you start out with your testimony please, and
    then we'll go to Latham and down the table that way. Proceed.

                      STATEMENT OF NOAH COPPESS,
               FARMER, COPPESS FAMILY FARMS, STANWOOD, IA

        Mr. Coppess. All right. Hey, everybody. My name is Noah
    Coppess. I'm a fifth-generation farmer from Cedar County, Iowa.
    My wife, Jess, and I farm full time and run an agriculture
    business while raising our two teenage kids, Tucker and Ellie,
    on the farm. We grow commercial corn, seed corn, soybeans, and
    have a small cow herd. Today, I'm here to represent my farm, my
    customers, my county, and my fellow members of the Iowa Farm
    Bureau. I've been involved in my family's row crop farm for my
    entire life. After college, I spent 12 years working in the
    local farm equipment dealership before I left to work on our
    farm full time. After getting our ag service business
    established, we have grown into the fertilizer and pesticide
    sales market and can discuss the challenges we have had and the
    pressures we see on our row crop farm.
        The reality in farming today is we're price takers rather
    than price makers. That's especially true when consolidation
    limits our options. It's further complicated by lack of price
    transparency. With farmers forced to operate at the liberty of
    the market at the front and back end, I have concerns with our
    input and equipment supply chains and their ability to
    manipulate our costs. I recognize that consolidation can offer
    benefits, including cost efficiencies and technological
    adoption, which are critical for meeting our global food
    demand. However, if the market becomes too constricted, it is
    ultimately the farmer who loses.
        Fertilizer pricing has become very volatile with, at times,
    wild swings and costs varying as much as 25 to 50 percent from
    year to year. We are asked to prepay for fertilizer 3 to 6
    months prior to it being applied to the soil and up to 14
    months before the crop will be harvested. Many of the contracts
    are written with a narrow window to get the products applied,
    or the contract expires and the input is repriced at a higher
    value or monthly fees can be applied to extend the contract.
    Phosphate fertilizer has become a bare-minimum usage fertilizer
    on our farm due to the cost. We have invested significant
    capital and time trying to find other ways to manage our
    phosphorus needs as the cost of this input is at a point of
    negative return.
        Following a profitable 2022, farmers lost nearly a quarter
    of their income in just 2 years due to slumping commodity
    prices and record high input costs. That pain was felt on our
    farm, and we're feeling it today. In our ag business, we are a
    startup. We struggle with the supply chain's willingness to
    sell us product due to our low volume and competition with
    their bigger customers. In our area, there are several retail
    locations to buy fertilizer from. However, there are very few
    wholesale options. Regardless of who I work with, we will be
    competing with bigger customers, therefore, struggle to get
    access.
        We use John Deere Operations Center to provide connectivity
    between our equipment, record data in our fields, and implement
    strategic placement of seed, fertilizer, and pesticides. John
    Deere's user agreement mandates they have access to all of the
    data we record from our equipment and the right to do as they
    please with it. We utilize a tool called See & Spray to
    minimize the application of certain herbicides to the weeds the
    sprayer can see from a highly advanced camera and processing
    system. This has reduced the use of pesticides by 50 to 80
    percent. This machine comes with a tech fee charged per acre,
    not applied, so we are paying a usage fee on 50 to 80 percent
    of the fields that we don't even use the product for. We also
    have to pay a significant fee to purchase the upgrade on the
    machine at the beginning. There are other platforms where
    equipment manufacturers have gone to per-acre usage fees that
    we don't use on our farm. We are under heavy pressure to find
    safer and environmentally friendly ways to produce our
    products. How is it that we need to pay for the equipment up
    front and then pay a usage fee in addition to achieve these
    goals?
        We struggle in the seed industry with genetic options. If
    we want a traited seed for pesticide or disease defense, we can
    be at the mercy of what one company has bought from another. In
    effect, we are often getting, genetically, the same or similar
    hybrid from multiple companies in a different bag. This
    situation is prevalent in the soybean side within list traits
    being slow to the marketplace and in rootworm protection with
    corn. We lack options. The consolidation of the companies has
    narrowed up the development of new genetics. On our farm, we
    raise non-GMO and specialty crops when the opportunity aligns
    with our resources. We're struggling with advancements in seed
    genetics to support those areas. With only a couple companies
    owning the majority of the seed production, we're at the mercy
    of what they choose to focus on. We've been planting the same
    soybean variety for 5 years now due to lack of competitive
    options. This limits the resiliency of our farm.
        It's time to take a look into these areas and assess what
    bargaining strength the farmer has today. We have no doubt that
    consolidation will continue, and the challenge for lawmakers
    and the ag industry will be to balance the efficiency with
    fairness and resiliency.
        [The prepared statement of Mr. Coppess appears as a
    submission for the record.]
        Chairman Grassley [off mic]. Thank you, Mr. Coppess. Now,
    Mr. Latham.

                       STATEMENT OF JOHN LATHAM,
             PRESIDENT, LATHAM QUALITY, INC., ALEXANDER, IA

        Mr. Latham. Thank you, Chairman Grassley, Senator Durbin,
    and the entire Committee, for the opportunity to speak with you
    today. My name is John Latham. I'm a third-generation seedsman
    from Alexander in North Central Iowa. My grandfather, Willard
    Latham, started our business in 1947. I own Latham Quality,
    Incorporated, with my wife, Shannon, and my brother, Chris. Our
    independent seed company sells corn, soybeans, and alfalfa seed
    under the Latham brand in seven Upper Midwest States. We also
    operate a soybean production plant and have a corn breeding
    program.
        Independent companies are the lifeblood of rural America
    because we are connected to the farmer customers we serve.
    Independent seed companies can offer products better suited for
    specific geographies than the multinationals. Unfortunately,
    many independent companies are going out of business as these
    multinational companies have become more powerful and, frankly,
    predatory. The seed corn industry is 90 percent controlled by
    two companies--90 percent--including their own brands and
    licensing. Due to this massive consolidation, the price of
    technology on our seeds has gone up significantly since 2021.
    These higher seed royalty prices are contributing to higher
    input costs for farmers and forcing many family farms to close.
        Prices aren't just increasing for the newest and latest
    seed technology, but also in older technologies that are going
    off patent or soon to be off patent. One example is NK603, a
    glyphosate-resistant corn product which went off patent in
    2022. Farmers are being charged the highest royalties ever for
    this off-patent technology. More than 90 percent of biotech-
    traded corn in the United States is glyphosate resistant, so
    farmers are paying billions of dollars for seed royalties on a
    trait that has been off patent for 3 years.
        As difficult as it's been for independent companies across
    America, I believe we have been hit the hardest. Latham started
    corn breeding in 2020 with the belief that we could create
    niche corn products that could help our customers fight corn
    diseases, like tar spot. We created products that weren't
    available from our suppliers, but our very modest corn breeding
    program was met with anger from our leading Big Ag provider.
    After a heated discussion about our corn breeding program, in
    April 2022, we were told Latham's corn products would have the
    largest price increase in company history, and it did. Every
    technology, even older technologies that had gone off patent or
    soon to go off patent, were increased.
        Imagine having to license all your technology from your
    largest competitor and then having to give your competitor
    internal company information, including the names and orders of
    all your customers. Imagine putting your hard-earned money into
    a breeding program to help your customers but being forced out
    by the dominant firms in the industry. Imagine being subjected
    to restrictive rebate programs that require you to sell, near
    exclusively, one company's technology in order to qualify for
    those rebates, and imagine relying on those rebates to generate
    any kind of profit. Imagine having your entire year of profits
    being tied to off-the-record funding that can be taken away at
    any time by your largest competitor. Imagine being in a
    business where you don't know your costs of goods before you
    buy it and your competitor can raise your costs at any time.
    Imagine being in a business where the older products that you
    can't sell increase in price, leaving you with a mountain of
    expensive inventory and higher prices for farmers. Imagine
    being in a business where the technology royalty continues to
    increase even after it goes off patent. Seed prices increase
    even when commodity prices are low, and farmers can't even
    break even. Imagine being in an industry where it is impossible
    to capture off-patent genetics because of restrictive licenses
    and scrambled codes of the seed depository. These are the
    unfortunate realities of an independent seed company in an
    industry without competition or oversight. Farmers are paying
    the price with higher input prices. The lack of new breeding
    programs and diversity of genetics is a national security risk
    where a bioterror attack or disease could threaten the Nation's
    corn supply.
        I appreciate very much the opportunity to tell our story
    and the story of other independent seed companies. I do so at
    great personal risk, but I believe our company's story and the
    story of independent, family owned seed companies, and the
    farmer customers that we serve must be told. I look forward to
    taking your questions. Thank you.
        [The prepared statement of Mr. Latham appears as a
    submission for the record.]
        Chairman Grassley [off mic]. Thank you, Mr. Latham. Now,
    Mr. Ragland.

                STATEMENT OF CALEB RAGLAND, PRESIDENT,
               AMERICAN SOYBEAN ASSOCIATION, MAGNOLIA, KY

        Mr. Ragland. Good morning, Chairman Grassley, Ranking
    Member Durbin, and Members of the Senate Judiciary Committee.
    It is an honor to join you today to testify on behalf of the
    American Soybean Association regarding the State of the farm
    economy and the impacts of rising input costs for farmers. My
    name is Caleb Ragland. I'm a ninth-generation farmer from
    Kentucky. I also serve as president of ASA.
        U.S. agriculture is facing significant challenges, which
    are illustrated by rapidly plunging margins for farmers.
    Commodity prices are down nearly 50 percent from highs
    experienced just 3 years ago, and farm production costs
    continue to skyrocket for land, seeds, fertilizers, pesticides,
    and farm machinery, while high interest rates create additional
    pressure. For soybean farmers, the loss of our largest export
    market due to trade retaliation by China has made financial
    problems even worse. We are hopeful that this market will be
    restored following the meeting between Presidents Trump and Xi.
    Still, high production costs and market losses mean soybean
    farmers are expected to face a loss of around $109 an acre for
    this year's crop.
        Farmers are paying more than ever to grow their crops. In
    just 5 years, seed prices have increased by 18 percent,
    fertilizer by 37 percent, pesticides by 25 percent, machinery
    by 23 percent, and interest expense by 37 percent. Seed is a
    key cost consideration for farmers. Advancements in seed
    technology and pesticides have delivered real agronomic
    benefits but at an added cost. The importance of seed quality
    and pesticides to crop protection means farmers cannot cut
    these costs. Fertilizer is a major component of overall
    production cost. Unlike most other farming inputs, fertilizer
    relies on global supply chains, which makes the cost
    unpredictable. This is also a significant input risk that can
    impact the farmer's ability to have an accurate budget.
        While agribusiness has faced much consolidation, ASA has
    not done analysis to provide the Committee with an informed
    position regarding the impact of consolidation on our input
    cost. However, other factors are contributing to higher input
    cost. The U.S. imports $33 billion in inputs annually. For
    high-cost products, like fertilizer and pesticides, tariffs
    create a heavy financial burden. IEEPA tariffs have raised
    tariff-related input expenses for farmers from 1 percent to
    over 12 percent this year. Inputs also depend on the global
    market. Many fertilizers and half of the active ingredients for
    pesticides are imported. Global dynamics, like demand shifts
    and geopolitical issues, also impact prices. The high cost of
    farm production has eroded the financial safety net of soybean
    farmers and has made it harder to weather trade-related market
    losses this year. ASA appreciates actions to investigate
    competition and market dynamics impacting input price
    increases, like the USDA and DOJ competition partnership and
    the introduction of Chairman Grassley's Fertilizer Research
    Act, which ASA supports.
        If high input costs continue on this path, farm
    profitability for row crops, like soybeans, remains dire. As
    Congress and the administration continue to address the overall
    cost of farm production, I would like to highlight three
    immediate achievable opportunities to improve economic
    conditions for soybean farmers. One, remove IEEPA tariffs on
    critical inputs, machinery, and parts, which will immediately
    lower cost of production for farmers. Two, the 45Z tax credit
    and proposed RFS volumes will drive investment in soybean
    processing and biofuel production. That needs to be finalized
    this year. And three, given the state of the farm economy,
    targeted farm assistance is desperately needed to offset trade-
    related losses and negative basis being experienced in many
    regions.
        Thank you again for the opportunity to testify on behalf of
    U.S. soybean farmers regarding the impact of rising input cost
    on our industry. ASA appreciates the Committee seeking to
    identify opportunities to improve the state of the farm
    economy. I look forward to your questions.
        [The prepared statement of Mr. Ragland appears as a
    submission for the record.]
        Chairman Grassley. Thank you, Mr. Ragland. Now, Mr.
    Rosenbusch.

                  STATEMENT OF COREY ROSENBUSCH, CEO,
                THE FERTILIZER INSTITUTE, ARLINGTON, VA

        Mr. Rosenbusch. Thank you, and good morning, Chairman
    Grassley, Ranking Member Durbin, and Members of the Committee.
    The Fertilizer Institute is made up of importers, wholesalers,
    retailers, and manufacturers that serve our American farmers.
    There are over 200 producers of fertilizers globally, and the
    U.S. is 1 of 3 countries in the world that has more than 20
    unique companies producing fertilizer. Half of the crop yields
    in this world are made possible by the use of fertilizer. I
    grew up in a small rural Texas town of Glenrose where we raised
    hogs and my dad was the FFA advisor, so the highlight of this
    job is to get out into the real world and visit with growers. I
    was recently at a farmer's co-op meeting, and there were two
    critical conversations that came up: the lack of market demand
    for their crops and high input costs.
        Fertilizer prices were at historic lows just a few years
    ago, followed by record highs. This kind of volatility is a
    challenge for growers and for the fertilizer industry because
    without farmers, there would be no fertilizer industry. We
    often speak of fertilizer as a single product, but it is
    actually many different materials, and most of our focus today
    will be on the three macronutrients: nitrogen, phosphate, and
    potash. They're each different resource-dependent materials
    with very different markets.
        The United States does have significant production of
    nitrogen in phosphate. However, we only have a small amount of
    production of potash and import almost 98 percent of our need,
    87 of which percent comes from Canada. The U.S. only accounts
    for about 7 percent of total global fertilizer production, and
    we are a net importer. Overall, 90 percent of all fertilizer
    used in this world is used outside of the United States, so if
    you hear nothing else I say today, please hear this. Fertilizer
    is a globally traded commodity subject to fierce global
    competition and supply and demand.
        To understand that supply and demand, we have to begin with
    geopolitics. China is the world's largest producer of
    fertilizers with about a third of all nitrogen and 40 percent
    of phosphate production. They are currently restricting their
    exports, which are forcing growers to source those tons
    elsewhere. India, which is the second largest consumer of
    fertilizers behind China, procure their products centrally
    through the Federal Government, which is then heavily
    subsidized for their farmers. Conflicts in the Middle East have
    interrupted Egyptian and North African nitrogen operations due
    to the natural gas supply, which is the feedstock for nitrogen,
    largely coming from Israel. When Iran's nuclear facilities were
    destroyed recently, it also seriously disrupted their
    fertilizer production. Iran is the world's second largest
    supplier of urea behind Russia. So, speaking of Russia, it's
    the largest global exporter of fertilizer, and, of course, we
    all know they're still facing sanctions because of the War in
    Ukraine. Russia also supplied a lot of Europe's natural gas,
    which resulted in about 70 percent of Europeans' nitrogen
    production being curtailed a few years ago. That made Europe
    the new marginal producer.
        So, you can see we've had significant global supply
    shortages for fertilizer, but we've also had demand growth.
    Fertilizer demand is tied to crop demand, and 50 percent of all
    the crop nutrients used in the United States is driven by corn,
    and while commodity prices have been low, we saw 8 million
    additional planted acres of corn this year, which created even
    more demand for fertilizer. Many of the largest globally traded
    agricultural commodities that are experiencing price growth,
    thus creating high fertilizer demand, are not even grown in the
    United States, such as canola, coffee, and palm oil. We
    recognize how challenging and frustrating this must be for our
    customer partners at a time when they're experiencing very low
    prices for the crops that they grow, and that's why we want to
    be a partner with our growers and with policymakers to develop
    some solutions.
        In the interest of time, I'll refer to my written testimony
    for a detailed description of those policy solutions, but I can
    summarize it by saying that fertilizer production facilities
    are very capital intensive, sometimes costing as much as $5
    billion for a nitrogen facility or 10 years to develop a potash
    or phosphate mine. But I do want to be very clear that
    fertilizer is a globally traded commodity, so while we cannot
    directly influence prices, we can bolster domestic supply to
    help mitigate geopolitical risks for our American farmers.
    Thank you.
        [The prepared statement of Mr. Rosenbusch appears as a
    submission for the record.]
        Chairman Grassley [off mic]. Thank you, Mr. Rosenbusch.
    Now, Mr. LaVigne.

      STATEMENT OF ANDREW LaVIGNE, PRESIDENT & CEO, AMERICAN SEED
                      ASSOCIATION, ALEXANDRIA, VA

        Mr. LaVigne. Thank you, Chairman Grassley, Ranking Member
    Durbin, and Members of the Committee for the opportunity to
    testify for the hearing today. I'm Andy LaVigne, president and
    CEO of the American Seed Trade Association, or better known as
    ASTA. We were founded in 1883 and are one of the oldest trade
    organizations in the United States. Its membership consists of
    nearly 700 companies involved in seed production, distribution,
    plant breeding, biotechnology, and related industries in North
    America. Our members produce seed, from alfalfa to zucchini,
    and in production systems, from conventional to organic to
    biotechnology.
        Every season, farmers choose seeds that have been improved
    through plant breeding, biotech, and seed treatments. Our
    members ensure that farmers have access to reliable, resilient
    seed varieties tailored to local growing conditions, helping
    them reduce risk and boost crop productivity. Seed development
    and production begins with advanced breeding and research
    programs, moves to seed production with practices ranging from
    large-scale crops to hand-pollinated varieties, then the seed
    crop is harvested and concludes with conditioning, treatment,
    and testing of the seed quality and purity prior to commercial
    sale. This process could take place in multiple countries as
    companies rely on different regional climates and leverage
    multiple growing seasons per year to accelerate the rate of
    both research and seed production activities. Even with this
    highly efficient and optimized process, it can take 8 to 10
    years and several million dollars just to bring a new variety
    to market. Plant breeding and seed improvements is an ongoing
    iterative process that depends on the market, pest and disease
    evolution, and constant fluctuations.
        In the case of seed companies developing biotech products
    or biotech seed, the cost of domestic and international
    regulatory compliance are significant. A study in 2022
    estimates the cost and time to bring a new biotech trade to
    market at roughly $115 million and over 16 years. In export
    markets, particularly for a subset of biotech crops, the seed
    industry faces severe constraints from non-tariff trade
    barriers, including countries that deliberately use their
    regulatory system to stymie American seed innovation and
    exports of American grain products.
        The seed sector has a long history of delivering seed
    choice and ensuring seed performance for America's farmers,
    gardeners, and landscape managers, ensuring the best seed is
    available to meet the needs of the wide range of environments,
    soil types, and management practices. International trade and
    global movement of seed is critical to the U.S. seed industry
    to efficiently develop and commercialize and improve varieties
    for U.S. farmers. Across all seed varieties, the continued
    escalation of tariffs on seed poses a unique challenge. For
    example, a tomato seed can cross six or seven different
    international borders for research and development to do seed
    multiplication and clean and package seed before it's sold to a
    farmer. For each crossing, a tariff may be levied on that same
    seed, burdening the same seed producer multiple times.
        Our industry believes there's a path forward to alleviate
    some of the pressures that both farmers and seed producers
    currently face. First, we're advocating, both domestically and
    internationally, for risk-proportionate, science-based
    regulatory reform to right-size regulatory compliance processes
    and the associated costs that impact companies of all sizes.
    Our advocacy applies to plant breeding innovations, like gene
    editing, as well as biotech crops. Reform is needed to ensure
    that rapid pace of scientific innovation is not hampered by
    unjustified regulatory obstacles. Second, and I'll hit this
    very quickly, but most important is our investment in
    agricultural research, not only from the private sector but
    from the public sector. Our partners in our land grant
    institutions and our research institutions are vital in this
    process as we go forward in discovering the genetics-based
    science, and that needs to continue, and they're stressed as
    all of you know right now. Research at the land grant
    institution is even more important as we look at our lower
    acreage crops. Fruits and vegetables, forages, grasses, turf is
    very important to help in that public/private partnership to
    bring improved varieties to the marketplace.
        So, in closing, from seed to table, the entire agricultural
    value chain is navigating pressures from the brunt of inflation
    and economic uncertainty. We know that farmers are taking this
    economic challenge head on to continue feeding, fueling, and
    clothing the world. Seed producers are weathering it alongside
    them while working to deliver the high-quality, professionally
    produced seed U.S. farmers expect season after season. And when
    farmers buy that bag of seed, they're investing in yield
    potential, resilience to pest and weather, and the ability to
    produce more with less. They're investing in better seed for
    better crops for better quality of life. Thank you, Chairman
    Grassley, Ranking Member Durbin, and Members of the Committee.
    I look forward to answering the questions.
        [The prepared statement of Mr. LaVigne appears as a
    submission for the record.]
        Chairman Grassley. Thank you, Mr. LaVigne. Now, Dr. Moss.

        STATEMENT OF DIANA MOSS, VICE PRESIDENT AND DIRECTOR OF
     COMPETITION POLICY, PROGRESSIVE POLICY INSTITUTE, WASHINGTON,
                                   DC

        Dr. Moss. Thank you, Chairman Grassley, Ranking Member
    Durbin, and Members of the Committee. It's an honor to be here
    today. I am Diana Moss, director of competition policy at the
    Progressive Policy Institute.
        Seeds and fertilizers feature highly concentrated markets
    with only a few firms, high prices, and little choice. Both
    sectors have been the subject of massive consolidation and
    strategic business practices. In the late 2010's, the six large
    agricultural biotechs merged to form the Big Three. Today, two
    firms control 72 percent of the corn seed market and 66 percent
    of the soybean market. Three firms control 83 percent of the
    cotton seed market. Fertilizer markets are also highly
    concentrated. The four-firm ratio for nitrogen in the U.S. is
    about 77 percent, and the four-firm ratio for potash and
    phosphates is 100 percent. These are big numbers. Highly
    concentrated markets are far more conducive to anticompetitive
    coordination rather than the hard-nosed competition that lowers
    prices, lowers licensing fees, tech fees, and royalty rates.
        So, what does high concentration mean for input costs and
    food prices? To be sure, they are affected by the dynamics of
    supply and demand, shocks to supply chains, such as weather and
    disease and U.S. trade policies. But as seed and fertilizer
    markets have become more concentrated, it is hard to dispute
    that consolidation and business practices have played a major
    role. U.S. farmers struggle with the high cost of intermediate
    inputs, such as seeds, pesticides, and fertilizers, which
    account for almost 40 percent of their total intermediate
    production costs. In the last 30 years, the average price
    farmers paid for genetically modified seed rose by almost 450
    percent, while their commodity prices increased by only 50
    percent. In fertilizers, prices for phosphorus, potash,
    nitrogen spiked dramatically in 2008, again in 2012, and again
    in 2022, raising concerns about the potential for collusion
    amongst global fertilizer producers. All of this puts the
    squeeze on farmers' margins.
        The Crop Farm Index for prices farmers receive for their
    commodities has remained consistently below the index for
    prices paid by farmers for feed, fuels, seeds, and fertilizers.
    These supra-competitive input prices initially harm farmers,
    but they quickly translate into high food prices for consumers
    who are already grappling with a high cost of living. Consumers
    spend 13 percent of their limited budgets on food, the third-
    largest budget item behind housing and transportation. Public
    concern about food price inflation is at an all-time high.
        In light of these troubling trends, I believe we need to
    widen the lens on competition and agricultural inputs.
    Antitrust's role has been less than exemplary as concerns over
    excessive consolidation in ag biotech and potential price
    fixing in fertilizers has gone largely unpursued. The agencies
    have also ignored other costs of consolidation, such as
    delaying entry of generic GM seed, bundled cropping systems
    that are engineered not to operate with other products and lock
    out smaller innovators. Antitrust has also ignored the loss of
    stability and resiliency in supply chains that are created by
    market power bottlenecks. These issues now transcend
    traditional competition policy concerns.
        U.S. farmers should be able to count on fair commodity
    prices, input costs, and sustainable margins. Consumers should
    be able to count on low food prices. Both farmers and
    consumers--most important--should be able to count on having
    choice in what they buy and who they buy it from. A more
    coherent policy approach is to strengthen antitrust
    enforcement. Another approach is to require more or better
    coordination between the DOJ, the FTC, and USDA, including
    better data collection to promote price transparency. We might
    also consider giving USDA authority to intervene if
    consolidation raises supply chain safety, stability, and
    resiliency issues. With farmers in the middle of this vortex,
    we should also be very worried that high concentration costs,
    prices, and a lack of choice risk the permanent loss of U.S.
    agricultural productive capacities if farmers hang up their
    hats and close down their farms. This all means that promoting
    competition should garner broad bipartisan support.
        I appreciate the opportunity to appear here today and look
    forward to your questions.
        [The prepared statement of Dr. Moss appears as a submission
    for the record.]
        Chairman Grassley. I compliment all of you for staying
    within the 5 minutes. We're going to have 5-minute rounds of
    questioning. You'll see Members in and out because there's two
    votes on the floor, so we'll take turns questioning.
        Mr. Rosenbusch, in 2014, the Obama administration
    discontinued annual reports on the fertilizer industry. Since
    then, prices have become more and more opaque, making it harder
    for farmers to know if they're getting a fair deal. My
    Fertilizer Research Act seeks to fill in these reporting gaps.
    So, could you tell us what measures are being taken to ensure
    transparency and pricing mechanisms so farmers aren't unfairly
    penalized by last-minute price increases?
        Mr. Rosenbusch. Mr. Chairman, thank you for that question,
    and we fully support your efforts to provide transparency to
    growers. We believe them having information about what's going
    on in the marketplace is very critical. We've been working with
    your staff, your team, as well as on the House side to
    reinstate the position at the United States Department of
    Agriculture that has been vacant for more than 20 years now
    that was focused on fertilizer pricing and transparency. We
    believe growers having that independent source at USDA would be
    of tremendous benefit to growers and to farmers to be able to
    recognize and understand all of these dynamics that are going
    on and help them make decisions.
        Chairman Grassley. Would that also cover price transparency
    that you're talking about?
        Mr. Rosenbusch. Yes. They would also be doing research on
    prices globally, United States. They would be looking at a
    variety of different factors. Iowa State also did a research or
    a report on this a couple of years ago, but we believe that
    position would be helpful long term.
        Chairman Grassley. Okay. Dr. Moss, in your opinion, what
    types of public reporting could provide the necessary
    transparency in fertilizer markets for farmers looking for a
    fair price?
        Dr. Moss. Thank you for the question, Chairman Grassley. I
    think, first and foremost, increasing price reporting to
    promote transparency would be incredibly helpful not only for
    members of the industry, but for organizations like mine, think
    tanks, and university researchers to be able to do analysis of
    the markets and the prices that are emerging from highly
    concentrated markets. Price transparency remains a problem in
    agricultural inputs, but also in cattle and ranching, so I
    think that, in fact, the starting point is to improve and to
    promote coherent, efficient price collection data bases so that
    we can have better tools to work with.
        Chairman Grassley. For Mr. Latham, Mr. Coppess, major
    mergers and business transactions over the last decade reduced
    the Big Six ag companies to only four. U.S. Department of
    Agriculture Economic Research Service reports that Bayer and
    Corteva together account for more than half of the U.S. sales
    of corn, soybean, and cotton seed. What impact does this have
    on your business? Has there been an impact on the number of
    corn or soybean varieties available to farmers?
        Mr. Latham. Thank you for the question, Senator. It's been
    a huge impact on our business, especially in the last 5 years.
    My brother and I, who's with me today--Chris--we were looking
    at prices over the last 5 years. Five years ago, 42 percent of
    a bag of seed went to seed royalties. Now 70 percent of a bag
    of seed goes to seed royalties, and, unfortunately, there's
    been no new innovation. These are the existing products that we
    had 5 years ago. There's been no new innovation, no upgrade.
    There are some new products but, overall, from 42 percent to 70
    percent has risen prices tremendously, and they did it because
    commodity prices were good at the time a few years ago, and
    they said, well, farmers can afford it now. So, the prices went
    up significantly, and now, unfortunately, commodity prices are
    down, and those prices haven't gone down at all.
        Chairman Grassley. Mr. Coppess.
        Mr. Coppess. Thanks for the question, Senator Grassley. On
    our farm, when we purchase seed, I have a relationship I enjoy
    with a company and a seed person that we work with, and I'm not
    looking to change that relationship, but we have very little to
    no price bargaining. The price is the price, and it's
    consistently gone up every year with some slight changes. If a
    product doesn't perform, it might be a little cheaper the next
    year, but we've seen no relief in pricing of our seed
    commodities.
        Chairman Grassley. Okay. Dr. Moss, in your opinion, if a
    trade owner conditions access in ways that predictably raises
    rivals cost or limit stacking with competing traits, is that a
    problem and should it trigger enforcement?
        Dr. Moss. Yes, I do believe that is a problem. One of the
    biggest issues that we face right now is with the large ag-
    biotech mergers. We now see highly integrated, engineered
    systems of traits development, traited seed, agrochemicals, and
    now digital farming. It is very, very difficult for smaller
    innovators--say, independent seed companies or independent
    trade innovators--to penetrate markets, to get into a market,
    get a foothold, and to compete and effectively distribute their
    technologies when they are facing an enormous castle wall of a
    vertically integrated platform. And if companies hold a
    dominant position in any of those markets, that makes the walls
    even higher to scale.
        Chairman Grassley. Yes. Senator Durbin, before you go, has
    the vote started yet? Well, we'll wait and see. If we do, then
    Senator Lee's going to take over. Go ahead.
        Senator Durbin. Thanks, Senator Grassley. I'd like to say a
    word and get your reaction on the question of agricultural
    research. Since the 1930's, U.S. Government-funded ag research
    has helped to boost our farm output by 170 percent, according
    to the USDA. Today, most agricultural research in the U.S. is
    funded by large private sector companies, not the Government.
    Agricultural research funded by the U.S. Government has
    plummeted in the past 30 years, while Chinese Government
    investment in ag research has risen 8 times, surpassing the
    U.S. 10 years ago. Today, China is the world's biggest funder
    of government-funded farm research. The Trump administration
    and the DOGE cowboys want the USDA to close and consolidate a
    federally funded laboratory at the University of Illinois, the
    Soybean Germplasm Collection, which is the genetic seed bank
    whose scientists, since the 1940's, have cured soybean disease,
    improved soybean yields, and developed new varieties and uses,
    again, creating new markets for farmers. If this lab and its
    resources are closed or diminished, there is only one other
    remaining lab. You want to guess where it is? China. Is there
    anyone on this panel that thinks that's a good idea?
        [Nonverbal responses.]
        Senator Durbin. Obviously not. Mr. Latham, that kind of
    resource in agri and Federal research has to be part of your
    calculation as well when you talk about innovation, is it not?
        Mr. Latham. Yes. I would love to see more investment in ag
    research from public universities. That'd be very helpful.
        Senator Durbin. Well, I hope you'll all express that to
    your Members of Congress and the people you talk to.
        Dr. Moss, over the last decade, as you've noted and others
    as well, a series of mergers and acquisitions produce Big Three
    companies that dominate different sectors. In the seed sectors,
    it's Bayer, Corteva, and Syngenta. A similar trend produced the
    Big Three in fertilizer, Mosaic, Nutrien, and CF. Should
    antitrust enforcers at the FTC and Department of Justice have
    done more to block these mergers that produces the Big Three in
    seed and fertilizer?
        Dr. Moss. Thank you, Senator Durbin. The answer is an
    unequivocal yes. These massive mergers, which have completely
    restructured our seeds and fertilizer industries, are now
    responsible for high prices, limited choice, and less effective
    innovation. The major problem with antitrust today, especially
    in food and agriculture, is a very narrow view that antitrust
    takes in defining markets. The divestitures that were taken in
    the Bayer-Monsanto and the Dow-DuPont mergers were very
    targeted, very small, and there was a lot of deference to
    giving companies their mergers so that they could innovate
    better or innovate faster. We now know that high levels of
    concentration are not necessary to drive innovation, and these
    mergers, on balance, produced more harm than good.
        Senator Durbin. Do you believe the FTC and DOJ need new
    legal tools to stop the anticompetitive practices of these
    dominant firms, or is it simply a matter of stepping up
    oversight and enforcement?
        Dr. Moss. I think antitrust plays a very important role
    given the limited set of tools, but powerful tools antitrust
    works with. The consumer welfare standard can approach concerns
    about high prices, about lower quality, about less innovation,
    but the bottom line is most of antitrust enforcement just
    focuses on prices. The kinds of problems we see in food and ag
    are bottleneck supply chains, loss of resiliency and stability,
    a delay of generic entry. These are all things that are much,
    much harder for antitrust to approach in the normal course of a
    merger investigation or a monopolization investigation, which
    is why I mentioned we might want to start thinking about giving
    USDA more authority.
        Senator Durbin. Mr. Rosenbusch, how do you respond to those
    observations?
        Mr. Rosenbusch. Thank you, Senator, for that question. We
    believe we need a strong domestic fertilizer industry to
    compete in a global marketplace, especially when you're looking
    at countries that are often State-owned enterprises producing
    fertilizers. We think the FTC has taken a close look at this.
    As a matter of fact, in the last 2 years, the two acquisitions
    in this space were carefully studied by the FTC and reviewed,
    and we've also seen the USDA, 2 years ago, go through a
    competitive analysis of the industry to ensure that we are
    competing on a global level and global supply and demand for--
    --
        Senator Durbin. Excuse me for interrupting, but I have just
    20 seconds left. The farmers who are buying your product say
    you're killing them. You've consolidated, so they have few
    choices, take-it-or-leave-it choices, and your prices are
    killing them. When you say you're competitive globally, it
    doesn't help the farmer in Illinois and Iowa to know that the
    global market is competitive. How do you respond to that?
        Mr. Rosenbusch. We need the farmers to succeed. They need
    access to fertilizer----
        Senator Durbin. But you're killing them with your prices.
        Mr. Rosenbusch. And those are all driven by global supply
    and demand. A lot of these geopolitical events and reliance on
    some of that foreign supply coming in is a huge impact on that.
        Senator Durbin. Thank you.
        Senator Lee [presiding]. Mr. Latham, I'd like to start with
    you, if that's okay. Where are the main barriers that
    independent seed companies face when licensing or stacking
    patented traits in this industry?
        Mr. Latham. Where do I begin? There's a long list, a lot of
    areas that I could go into. You know, one thing that I think
    has hurt the industry in general, we have these restrictive
    rebates that we're under, which really stifle competition
    because if a new breeding company comes into the market and if
    the whole industry is under a rebate, that if they go to that
    new innovator, they're going to lose their rebate and could
    fall off a cliff there. So, I think that's one thing that's
    really impacting the whole industry, and there's a whole longer
    list, and I know you have short time.
        Senator Lee. Now, when we think about intellectual property
    laws, they're kind of a paradox because, on the one hand, the
    whole point of intellectual property laws is to give someone at
    least a temporary monopoly in something, but on the other hand,
    they are pro-competitive to the extent that it fosters
    innovation. In your view, how does our current intellectual
    property framework either help or hinder competition or
    innovation?
        Mr. Latham. Yes. I think I'm all for patents and
    intellectual property protection. Obviously, that can create
    innovation. You have to have that to have innovation, but,
    unfortunately, we see some of these patents where the products
    get stacked with some new product only to be able to use to
    extend that patent, and so the patents go from 20 years to many
    more years. And unfortunately, in 2014, a lot of different corn
    traits went off patent, and we still don't have any market now
    for off-patent technology on the corn side of the business, so
    something needs to fundamentally change.
        Senator Lee. What about consolidation? When there's
    consolidation among the major players in the seed industry and
    among trait owners, how does that influence your research and
    development strategy internally?
        Mr. Latham. Yes. Unfortunately, on the corn side, and you
    mentioned the stat, too--90 percent--and that includes
    licensing as well as their own brands. But when you have that
    big of consolidation, it makes it very difficult for any new
    innovator to get into the market. Especially if they want to do
    traited or just even conventional, it makes it very difficult,
    so, we've seen. Since 2016, when the Committee met last, we've
    seen massive consolidation, we've seen less innovation, and
    we've seen much higher prices, unfortunately, for our farmer
    customers.
        Senator Lee. Those two things naturally lead one to
    another, right? I mean, diminished competition pretty much
    always is going to result in higher prices----
        Mr. Latham. Absolutely.
        Senator Lee [continuing]. Or at least diminished quality,
    sometimes both.
        Mr. Latham. Absolutely.
        Senator Lee. And there's no exception to that here and the
    more consolidation you see, regardless of what the cause of
    that is. But let's suppose if it's prompted by an excessive
    Federal regulatory footprint, that can do it, but regardless of
    what the cause is, there are fewer competitors. There is often
    less competition, and, always, when you see less competition,
    that causes other problems. Mr. Coppess, have you noticed
    reduced competition or consolidation among local dealers or
    fewer independent options over time?
        Mr. Coppess. Thank you for the question. Yes, the
    independent seed companies, when somebody retires, moves on,
    oftentimes that doesn't get replaced by a younger person or a
    new person taking on that business. That dealership just goes
    away oftentimes.
        Senator Lee. Okay. That's helpful. And, Mr. Ragland, how
    does dependence on imported potash and imported nitrogen affect
    the U.S. growers' resilience and planning?
        Mr. Ragland. Well, as we mentioned in our testimony, it's a
    global market, requires a lot of planning ahead. There's global
    forces at work, and we have a very limited number of options
    where we can purchase, and the less competition, oftentimes the
    higher the prices are.
        Senator Lee. Right.
        Mr. Ragland. And we have some data we provided that shows
    that since the Ukraine War, in particular, prices spiked up
    drastically when that started. They came back down, but they
    have plateaued at a much higher cost than they were before.
        Senator Lee. Than they were before the war.
        Mr. Ragland. Yes. Yes.
        Senator Lee. They never fully retreated.
        Mr. Ragland. No, not anywhere close, and that has had a
    major impact across all of production and agriculture.
        Senator Lee. Right. Somewhat reminiscent of what happened
    during COVID.
        Mr. Ragland. Yes.
        Senator Lee. And finally, Mr. Rosenbusch, how did dealer
    incentive programs work in practice, and did they inadvertently
    limit fair competition?
        Mr. Rosenbusch. Thank you for that question, Senator Lee.
    On the fertilizer side, we do not have dealer incentive
    practices. That's more of a crop protection practice.
        Senator Lee. Okay. Thank you. My time has expired. Senator
    Klobuchar is up next.
        Senator Klobuchar. Okay. Thank you very much, Senator Lee,
    and thank you to the Chairman and Ranking Member for holding
    this hearing. I'm used to seeing many of you. I'm Ranking
    Member, as you know, on Ag, especially you, Mr. Ragland. I know
    you've testified before. I also note that Gail Slater is here,
    the head of antitrust for the Justice Department, who has had
    widespread support on this Committee.
        So, one of my farmers, a soybean farmer actually, described
    this situation right now as a perfect storm of ugly. He talked
    about the input costs, some of which are caused by
    consolidation that we've been so well talking about today,
    talking about what's happening with labor and the fact that we
    are missing some ag workers right now, and I think there's
    another way this could be handled. Talked about the tariffs and
    IEEPA, and I note that with soybeans, and I am, you know, glad
    that there's discussions going on, but even if that somehow
    that market came back immediately, as you know, Mr. Ragland,
    which it won't do, it's still a horror for our farmers in terms
    of half of their market is China, but the other half is other
    countries, nearly all of which are also subject to these
    tariffs.
        And so, I just think that if you look at this as a whole,
    and not just with soybeans, but for other crops, and what's
    happening with machine parts, as you point out, that this is a
    really hard thing that's going on right now, and I would like
    to see a reversal of these tariffs. I think that would be the
    quickest way to solve many of these problems, but let's start
    with market consolidation, and I'll start with you, Mr. Latham.
    What would it mean to you to have real competition in the seed
    market?
        Mr. Latham. Thank you for the question, Senator.
        Senator Klobuchar. Yes.
        Mr. Latham. It would mean everything to us, I think, if you
    had no restrictive rebates. The rebates are very punitive for
    independent companies. If you had broad licensing, I think you
    could see a flood of new breeding companies into the market,
    which is vastly needed. I think with gene editing, there's a
    whole host of new technologies we could take advantage of, but
    right now, when you've got a couple different companies that
    are controlling the whole market, it makes it very difficult
    for our company----
        Senator Klobuchar. Okay. Thank you.
        Mr. Latham [continuing]. To invest in new technology.
        Senator Klobuchar. Thank you. That's helpful. Ms. Moss,
    quickly, how does consolidation affect the resiliency of the ag
    system?
        Dr. Moss. Thank you, Senator Klobuchar, for the question.
    Consolidation is now responsible, in many food ag supply chains
    as well as in healthcare, for creating enormous market power
    bottlenecks where you have powerful companies, oligopolies, or
    dominant firms controlling prices paid to producers, but then
    also controlling prices that consumers have to pay in the
    grocery store. These bottlenecks are really susceptible to
    instability. If a supply chain is hit by some sort of exogenous
    shock, like weather or disease as we saw with COVID, then there
    are very few other competitors to step in, and so supply chains
    go down, and that is not only a national security issue, but a
    health and human safety issue.
        Senator Klobuchar. And just a quick answer on this because
    I called you as a witness many times when I Chaired the
    Antitrust Subcommittee, now working with Senator Blackburn on
    the Tech Subcommittee. Would reform to our antitrust laws with
    either the CLARITY bill or the bill that Senator Grassley and I
    have introduced, which is just beyond specific industries,
    would that be helpful when it comes to these issues?
        Dr. Moss. Absolutely, yes.
        Senator Klobuchar. Okay.
        Dr. Moss. Anything to strengthen, modernize, and clarify
    our laws.
        Senator Klobuchar. Okay. Thank you. Mr. Ragland, could you
    talk about the market for soybeans outside of China and what's
    happening with some of that as well because I think all the
    focus gets on China, but there's a lot of other countries.
        Mr. Ragland. Well, those markets outside of China are
    roughly half of our exports. China's the other half of our
    exports, and those markets are fairly strong, but they're only
    a limited amount of the demand for our product, and that gaping
    hole that is left by the lack of the China involvement is----
        Senator Klobuchar. Mm-hmm.
        Mr. Ragland [continuing]. Very detrimental on our prices
    right now.
        Senator Klobuchar. And is the tariffs under IEEPA affecting
    all of these markets?
        Mr. Ragland. Yes.
        Senator Klobuchar. Mm-hmm. That's what my----
        Mr. Ragland. Yes.
        Senator Klobuchar. So, in my State, about 60 percent of the
    soybeans are exported, which is pretty high. Do you want to
    talk about, just in general, the export market, which we
    cherish, and not just for soybeans, but corn and other things,
    why that's such an integral part of American agriculture
    because we're not going to eat everything we make.
        Mr. Ragland. Yes. Soybeans are the largest ag export from
    this country, and it's so vital to the economy, not just of
    agriculture, but of rural America.
        Senator Klobuchar. Mm-hmm.
        Mr. Ragland. And that gaping hole that is left by the lack
    of the China involvement right now is going to trickle down to
    our rural communities and rural economies----
        Senator Klobuchar. Mm-hmm.
        Mr. Ragland [continuing]. And have a very detrimental
    impact because rural America agriculture is the backbone of
    rural America.
        Senator Klobuchar. Right. I think we make about 20 percent
    more than we use here, and that is what allows us to keep going
    and why this is such, as my farmer called it, a perfect storm
    of ugly. Thank you.
        Mr. Ragland. Thanks.
        Senator Grassley. Senator Britt is next, but I hope we can
    keep this hearing on [off mic] competition and price
    transparency. Go ahead, Senator Britt.
        Senator Britt. Thank you. Mr. Chairman, thank you for
    holding this hearing on this critical and timely issue.
        Agriculture is the bedrock of Alabama's economy. So, 1 in 5
    jobs in our State are tied to the agriculture industry. I am so
    proud of our farmers and what they do, knowing that they feed
    and clothe people, not just coast to coast, but across the
    world, you know, ranking in the top States in the country,
    Alabama does, when it comes to poultry, when it comes to
    catfish, peanuts, cotton, and we are really proud of the work
    that our farmers do. And Alabama farmers are acutely familiar,
    though, with the impact of skyrocketing input costs and what
    that's done on the bottom line. When we look at, like, the last
    4 years, knowing that input costs, I mean, have gone up across
    the board, but that our agriculture community has been hit the
    hardest, and just knowing that farmers are experiencing record-
    breaking yields, but yet losing hundreds of dollars an acre.
    And so, when you try to square these things up, you know that
    we have to do something. In fact, based on historical yields,
    every major row crop, from peanuts to cotton to soybeans, will
    be produced at a loss in 2025.
        And so, food security is national security. We say that all
    the time, but we also know that our agriculture community and
    our farmers are the bedrock of our rural communities, and if
    farmers are not thriving, our rural communities are not either,
    and so there is so much at stake in making sure that we get
    this right. There are real concerns with the limited number of
    companies that provide seed, fertilizer, and crop protection
    products to our farmers, but that consolidation doesn't stop
    with inputs. We also see the same consolidation in packers, in
    equipment manufacturers, and in farms to a certain extent. Crop
    input suppliers, manufacturers, and farmers have generally been
    forced to grow larger to achieve economies of scale and
    increase productivity while attempting to decrease costs.
        I want to start with Mr. LaVigne. It's clear that the
    primary driver of consolidation across the industry is a desire
    to lower costs. We've seen the consolidation, but instead of
    prices going down for our farmers, we've actually seen the
    opposite. Can you speak to some of the outside pressures that
    have prevented the industry from achieving true economies of
    scale?
        Mr. LaVigne. Senator Britt, thank you for that question
    very much. As we've continued to innovate in the agriculture
    industry, especially on the seed side, the cost of the
    regulatory compliance, especially in the GM or the biotech
    arena, has increased dramatically, and working with the grain
    industry to ensure that the markets that we export to, or our
    farmers export to, are open and have transparent processes to
    review those new products that come to market has been extreme.
    We've seen that in China, and we share the Chairman's comments
    that we hope to see good news come out of that this week
    because we were supposed to have those approvals in a phase one
    deal with China, and now we don't have those. So, the
    regulatory costs have become extremely high and challenging as
    we try to bring new products to market.
        But I think we've got several regulations in place that are
    out of date. We have a very strong safety record with the
    production of new varieties and biotech traits. Over the last
    30 years under the Coordinated Framework, that has not evolved.
    We've not changed that process to make it more efficient for
    new companies to come into the marketplace as well as new
    products, and it's become harder and less science-based. The
    same with new varieties. As we look at, as John mentioned, gene
    editing as a tool, how is FDA, EPA, and USDA going to manage
    those policies coming into the marketplace? If they're too
    burdensome, it will be restricted to large companies that can
    afford the regulatory process.
        Senator Britt. Thank you so much for that, and I want to
    stay on that theme. Look, I've been encouraged by many of the
    things that Administrator Zeldin has done and the things he is
    looking at doing in the future. My question, Mr. Rosenbusch,
    is, in what ways do Federal regulations impact your member's
    companies' ability to bring innovation and affordable products
    to market?
        Mr. Rosenbusch. Thank you, Senator Britt, for that
    outstanding question because it is a huge impact on our
    manufacturers that are wanting to innovate and bring new
    products or even grow supply domestically. As we look to expand
    mining operations or build a new ammonia plant, you've got
    environmental permitting that needs to be streamlined. You also
    have new products. That you know, it's difficult to know where
    they get regulated, and so as you think about some bio-
    stimulant products that we're looking at or even tools that
    help nitrogen be more efficient, getting through the process at
    EPA or ensuring that it's regulated to the State level, which
    is where most fertilizer is regulated, is critical to giving
    farmers additional tools, especially in these difficult market
    times.
        Senator Britt. Thank you so much. Thank you, Mr. Chairman.
        Chairman Grassley. Senator Booker.
        Senator Booker. Mr. Chairman, as always, I'm grateful for
    the deference. I want to thank all the witnesses. Your
    testimony was very, I would say, frankly, invaluable.
        Mr. Latham, I'd like to start perhaps with a question for
    you. Despite two court orders in 2020 and 2024 banning dicamba
    use because of its damage to neighboring farms, causing
    millions of acres of crop loss, the Trump EPA, headed by a
    former industry lobbyist, recently proposed to reauthorize the
    herbicide. What impact would it have on your rural community
    and the farmers that you serve if EPA again approves dicamba
    for over-the-top use?
        Mr. Latham. Yes. Thank you very much for the question,
    Senator Booker. I, frankly, believe, I mean, we've seen enough
    issues that I think the technology is good and is needed
    because we need to be able to fight against weed resistance,
    but yet over-the-top causes so many issues that I don't think
    that it should be approved for over-the-top use.
        Senator Booker. That's great, because if it was, what would
    happen to the communities if it was again approved for over-
    the-top use?
        Mr. Latham. I mean, unfortunately, we've seen
    volatilization, we've seen drift into other crops, and, you
    know, and vineyards and different things, so it's become an
    issue in rural areas.
        Senator Booker. So, knowing what you know, what you just
    stated about how harmful it is and would be, as a practical
    manner, if it's once again approved, would your seed company
    have any discretion in whether or not to sell dicamba-tolerant
    seeds?
        Mr. Latham. You know, unfortunately, probably with the
    rebates, we would probably have to sell it to be able to make
    our rebates, unfortunately.
        Senator Booker. I mean, that seems stunning to me that
    something that you know should not be used in this way, but
    just to stay competitive in the market, you would have to sell
    it. Does that strike you as indicative of free market
    capitalism?
        Mr. Latham. It does not, and I don't like it either. I
    mean, I think we should be able to sell what our customers want
    and the best value for them.
        Senator Booker. Yes, and it really strikes me as not just
    an assault on free market capitalism, but something almost akin
    to an authoritarian system where you're told what you have to
    do, what you have to plant, what chemicals you have to use, and
    that's something that is very un-American to me. Would you
    agree?
        Mr. Latham. I agree.
        Senator Booker. Dr. Moss, I'm going to soon be introducing
    legislation to not only require--excuse me--not only place a
    moratorium on any new Big Ag mergers, but also require the DOJ
    to do a lookback at the biggest mergers over the last 20 years
    in the food and agricultural sectors to unwind any mergers that
    the DOJ finds caused material harm to competition, or to
    farmers, or to workers or consumers. Dr. Moss, do you think
    that this type of lookback would be beneficial, and if it was
    conducted, do you expect that many of the previously approved
    mergers would be found to have caused material harm?
        Dr. Moss. Thank you, Senator Booker, for that really good
    question. Yes, I think the value of retrospective studies for
    consummated mergers is really critical and invaluable. We in
    the economics community have agitated and urged and encouraged
    enforcers to spend more time doing lookbacks. Of course,
    they're resource intensive, and I know there are a number of
    pieces of legislation that would fund those types of efforts. I
    think at the stage we are at in food and ag, with the high
    levels of concentration and demonstrable evidence of high
    prices and slower innovation, the lookbacks would be really
    important. Ultimately, it's really up to the agencies to
    enforce very strong structural presumption against highly
    concentrative mergers. Unfortunately, we're still not there,
    and in the Dow-DuPont and the Bayer-Monsanto mergers, those
    structural presumptions for high concentration did not get a
    lot of attention, and now we're paying the price for that.
        Senator Booker. I mean, we consumers are paying the price
    for it, but our farmers are paying a tremendous price as this
    concentration of these very powerful companies, who now,
    frankly, thanks to Citizens United, poured millions and
    millions of dollars advocating for their mergers down here in
    Washington, but the real people being harmed are consumers,
    but, frankly, are our farmers themselves. And that brings up a
    final question, and I'm hoping Noah, I really appreciated your
    testimony, but given the extreme consolidation within America's
    agricultural industry, do you have any flexibility to purchase
    seeds or fertilizers from firms other than the Big Four?
        Mr. Coppess. Thank you for the question, Mr. Booker. We
    have retail locations that serve the needs for the fertilizer.
    We don't have the on-farm storage to handle some of those
    products. It's unclear often who the wholesale manufacturer is
    for that product, but you can tell when you go from retail to
    retail to retail and the price is the same, that we're coming
    from the same place.
        Senator Booker. Thank you. As the Chairman knows, I spent a
    lot of time in Iowa and met a lot of farmers from across the
    political spectrum. This gentleman here moved me when he said
    five generations on his farm, and I still remember sitting with
    farmers who still had that original deed going back to the
    1800's and the pride of every generation being able to not just
    make a living, but raise their families, and strengthen their
    communities, and provide for American hunger and demand, and
    suddenly, the economics that worked for five generations just
    barely add up. There's a nobility, sir, about what you do for
    America. You are great patriots, and I know how much you care
    about American farmers, sir. So, I'm really hoping we can find
    some bipartisan work to do together and keep people, like Noah
    and his family, at the center of our thought process because we
    can do something. This is not inevitable. This is un-American.
    This is a perversion of the free market. If we give them a
    chance to compete, I promise you that family will have another
    five generations of success on their farm.
        Chairman Grassley [off mic]. Senator Moody.
        Senator Moody. Thank you, Mr. Chairman, for holding this
    important hearing. I don't know that many people across the
    country have an understanding of how American agriculture
    touches not only their everyday lives, but their security. And
    I think this hearing is so important, whether they live in Iowa
    or Florida's heartland, which is where I am from, Plant City,
    Florida, the winter strawberry capital of the world--proud to
    hail from them from there--and also now represent Florida as
    their newest U.S. Senator. But agriculture is so important to
    our cities and States, indeed our Nation, and if there is one
    takeaway from everything that we're hearing and what every
    witness, I think, would agree with is that our food supply
    chain, its success, its security, is a matter of national
    security.
        COVID-19 really put this into focus for us as a country.
    For a long time, we never really thought about food, where it
    came from, many people, but then suddenly we were facing
    shortages in, certainly, many areas--PPE, other products--and
    we had to start looking to China. So, the same country that was
    responsible for COVID, we then had to import products from them
    to protect Americans. We faced medicinal shortages. Where did
    we have to look? China. I mean, there were so many places when
    it came down to a crisis point that we had to go back to our
    foreign adversaries when we determined we had weaknesses in our
    supply chain, and there is risk that comes with relying on a
    foreign country for critical supplies.
        Corporations, over time, have focused more and more on
    lowering costs by offshoring, relying on foreign inputs,
    minimizing their inventories, and we're now seeing how that
    affected jobs here in America, certainly. And there's interest
    in making sure we have fair markets, both domestically and
    internationally, but we can't lose focus of the effects of that
    on our domestic supply and security and America's interest, and
    it took that one pressure test in 2020 to see how vulnerable we
    are now.
        So, one event can jeopardize our access to PPE, formula for
    infants, essential medicine, so imagine how important it is for
    American agriculture to prosper and be resilient so that we
    have a food supply that withstands foreign interference.
    Florida is a big part of that. Not many people think of
    agriculture when they think of Florida. They think of
    flamingos, beaches, weather, all kinds of things, but they
    don't think of agriculture, but it is truly the lifeblood of
    our Nation's agriculture. So much of the supply chain that goes
    to supporting growth in our farms comes from Florida. When it
    comes to phosphate and the natural resources we need to put
    food on the table, Florida leads the way, and truly Florida
    feeds the world in that sense.
        It's in the best interest of American farmers in our State
    and our country to pursue a balanced approach. That is one that
    unleashes the full potential of American mineral production and
    American products that support agriculture and our food supply
    at the same time, ensuring we have a fair global market supply.
    There is no question that we must fortify our domestic food
    supply chain, and that starts with shoring up American products
    that are necessary to sustain a critical base of domestic food
    production. The industry that feeds us, that is life
    sustaining, is much bigger than any economic impact statistic,
    and we should take every step we can to make it more resilient.
    Securing the supply chain is a matter of national security, and
    if American agriculture stumbles, if fertilizer production is
    overburdened and neglected, our adversaries profit. We will
    become more and more reliant on those adversaries. I hope to
    avoid all conflicts. I think that should be every American's
    interest, but should a conflict occur, we will start weakened
    at the gate if we rely on our adversaries for food. We don't
    need the Art of the War to tell us that that is common sense.
        I want to start with and ask a former national FFA
    president, which I have great respect for being from Plant City
    and from FFA, Mr. Rosenbusch. Thank you for being here. Is
    phosphate essential to growing food?
        Mr. Rosenbusch. Well, thank you, Senator, for that
    question, and Plant City has had more national FFA officers
    than any other city in the United States, so congratulations on
    that.
        Senator Moody. I didn't know that. You just taught me
    something.
        Mr. Rosenbusch. Yes, you do.
        Senator Moody. Go, Plant City.
        Mr. Rosenbusch. Yes. Phosphate is one of the critical
    minerals. You cannot grow half the world's food on this planet
    without phosphate, and, of course, as you know, Florida is the
    center of that phosphate production, and we have tremendous
    opportunities in this country to expand if we can remove some
    of the regulatory burden around mining and manufacturing.
        Senator Moody. And ahead of the United States in terms of
    natural reserves--China, Russia--so if, in fact, we do not
    support and ensure that we have domestic production, we will
    become more and more reliant on China and Russia. Is that
    correct?
        Mr. Rosenbusch. Absolutely, and, Senator, China has
    restricted those exports, and they produce 40 percent of
    phosphates, which is one of the nutrients that's really
    challenging growers right now. And frankly speaking, one of the
    reasons they're doing so is to invest in lithium phosphate
    battery production, and so they definitely have policies that
    are impacting our growers here.
        Chairman Grassley. Senator Welch.
        Senator Moody. At the same time--if I might just finish
    this one question, Mr. Chairman----
        Chairman Grassley. Yes.
        Senator Moody. At the same time that we're making sure
    policies are supporting American growers and American products
    that support those growers, in order to keep input costs low
    for our farmers, we also have to ensure there's a fair global
    market. Is that correct?
        Mr. Rosenbusch. Yes, Senator.
        Senator Moody. All right. Thank you, sir.
        Chairman Grassley. Thank you. Senator Welch.
        Senator Welch. Thank you very much. I missed some of the
    testimony, but I have reviewed it and saw some of it. I just
    want to start with Mr. Coppess and Mr. Latham, and I also want
    to say to us, much of what the farm community is facing is a
    result of policies that have been allowed to take place by this
    Congress, and we all revere the hard work of our farmers, but
    we've got to do some work of our own and address these
    policies.
        Both of you talked about the high input cost, and what I
    understand is that it used to be about 10 bucks a bushel a few
    years ago. It is now $11 or $12. The selling price used to be
    $13 or $14 a bushel, and it's now about 10 bucks a bushel. Is
    that right? So, you're losing money on every bushel, right? And
    of course you lost markets. We sold $12 billion to China. How
    many bushels of soybeans have you sold, either of you, to China
    this year?
        Mr. Coppess. Well, when I drop it off, I'm not sure exactly
    where it's headed, but to my knowledge, we haven't sold very
    many.
        Senator Welch. None.
        Mr. Coppess. Right.
        Senator Welch. The market is absolutely destroyed, and that
    is directly a result of the tariffs. So, you have more patience
    than I do about these tariffs, but this is killing these guys,
    and we've got to acknowledge that and get their markets back.
    There is discussion right now about taking some of that tariff
    money and sending it to farmers, and God knows I support
    getting some aid to farmers, but let me ask you this question.
    Do the soybean and corn farmers in Iowa, would they prefer to
    work hard and sell their product to a market or get a
    government handout?
        Mr. Coppess. Thank you for the question. We don't want to
    live by the Government's hand. We're fine being the tip of the
    sword if we can correct the greater problems and have a better
    long-term future, okay?
        Senator Welch. Okay, but the point----
        Mr. Coppess. We're okay with that, but----
        Senator Welch [continuing]. Is you want to be self-reliant.
    You want to sell. You want to produce. You want to work hard.
    You don't want a government handout, right?
        Mr. Latham. Absolutely.
        Mr. Coppess. We would like to have fair trade.
        Senator Welch. Well, I am totally with you. You've got some
    supplemental income in your State on agricultural land. It's
    wind turbines, right? Those help the farmers?
        Mr. Coppess. We have wind turbines in our State. It's a
    discussion amongst different landowners whether it's a positive
    or negative thing.
        Senator Welch. Okay, but the farmer makes the decision. If
    we as a Congress take away the help for wind, that takes away
    some income for farmers. Is that correct or not?
        Mr. Coppess. On the farmland that has wind turbines, that
    would be correct.
        Senator Welch. Right, and, you know and what I know, we
    have dairy. That's our big farming in Vermont. Farmers are good
    at a lot of things, but one of the things they're astonishing
    at is fixing things. A headlight goes wrong on their tractor,
    they fix it, right? Something goes wrong, you don't have the
    right to repair your equipment and it costs a ton, and
    sometimes you lose production time because your tractor's down
    and you got to wait for the dealer to come out. I am
    introducing today a Right to Repair. So, if you buy a tractor--
    what do they cost, $250,000 now--you can fix it.
        Mr. Latham. Or more.
        Senator Welch. You can turn the screw, or do whatever it is
    or get the software you need. What's your view on Right to
    Repair?
        Mr. Latham. Thank you for the question. The farmer needs an
    option to either repair himself or go to an independent repair
    shop if he doesn't have a relationship with his dealership.
        Senator Welch. Well, I agree with that.
        Mr. Coppess. We need that technology.
        Senator Welch. And I want to tell you something. I just
    came from Vermont. Our farmers across the country--it's
    Vermont, it's Iowa--you guys all work hard, okay, and you have
    to face all kinds of things. They're completely beyond your
    control. The things we've been talking about here--the tariffs,
    the high input prices, the concentration, so you can't do seeds
    on your own--those are political decisions. Vermont right now
    is facing a crisis, our worst drought in 55 years, and our
    dairy farmers don't have the hay crop and the feed crop. You've
    got a lot of soybeans that are spilling over. Would you have
    any problem with USDA buying your soybeans to help us get
    through the winter and feed our animals in Vermont, one farmer
    helping another?
        Mr. Latham. I would have no problem with that, Senator.
        Senator Welch. In fact, you'd like it, right?
        Mr. Latham. Right.
        Senator Welch. You'd be selling----
        Mr. Latham. Right.
        Senator Welch. You'd be selling your surplus and helping
    our Vermont dairy farmers, who are just getting crushed by the
    drought that's really killed them. Well, I thank you about
    that. You know, we've got the phosphate, as you mentioned.
    That's everywhere. 14 percent increase in price in Vermont for
    our farmers. They have no control over that. We mostly import
    it from Canada. Is that an input cost that is also going up in
    Iowa?
        Mr. Coppess. It is. On our farm, we've minimized the use of
    phosphate down to an absolute necessity where we have to have
    it.
        Senator Welch. Right. Any----
        Mr. Coppess. It's simply a negative return to----
        Senator Welch. Any thoughts on what I understand is going
    to be the administration position that we should start
    importing cattle from Argentina? That going to help out?
        Mr. Coppess. Thank you for the question. On my farm, we
    have 10 cows. It's a small part of our farm. What I can tell
    you is I'm not a fan of the Government dramatically changing
    the price of something we have. I've got a 16-year-old and a
    14-year-old that are two cows each into starting their cow
    herd, and it's a tough day for them to realize the calves they
    have to sell to go buy more replacement heifers today are worth
    quite a bit less than they were 2 days ago when they're ready
    to go to market next week with them. So, that's a tough lesson,
    but there again, we're not a fan of the Government making those
    large swings for us.
        Senator Welch. Well, I'm with you. Mr. Chairman, you are
    our best farmer on the Committee, probably in Congress. You are
    patient with the President and I respect you for that, but I
    just want to say that I don't know him like you do, but the
    tariffs are really hurting us in Vermont. My dairy farmers and
    this drought, which they don't complain about, it's just
    something they've got to deal with. We'd love to be able to get
    some of your surplus, a grain, to help our farmers who lost
    their crops. So, they can't control the weather, they can't
    control a lot of things, but we can control some policies
    that'll make it possible for another five generations to keep
    going. So, I really appreciate this hearing, and I appreciate
    your leadership on ag issues, Mr. Chairman. Thank you.
        Chairman Grassley. Well, I hope you know, Senator Welch,
    I've consistently expressed my views to the President's Cabinet
    about the impact of tariffs. I hear that all the time from
    Iowans, farmers and non-farmers alike, and I've expressed my
    views to them a bit.
        I'm going continue to ask questions. I don't think
    anybody's coming back, and just as soon as I get called for
    this last vote, this will be the end of the meeting, unless
    somebody comes in that didn't get a first round. So, I'm going
    to ask Mr. Latham, across corn and soybeans today, are there
    still contractual or technical barriers that keep you from
    offering a seed where the competitor's trait stacked alongside
    another? Could you describe the specific clauses and data
    obligations?
        Mr. Latham. Yes. Thank you, Senator, for the question. Yes,
    there are restrictive rebates that we fall under as an
    independent seed company, and it happens a lot to farmers as
    well. But if we use an alternative and if we fall below, let's
    say it's usually 85 or 90 percent, and we could fall off,
    basically, a cliff and could lose our whole profitability for
    the year.
        Chairman Grassley. And, Mr. Coppess, farmers report rebate
    clawbacks, delayed allocations, and audit threats after trying
    rival products and services. Could you give us some details of
    the recent incidence where a supplier or retailer used rebate
    leverage or allocation delays to punish switching?
        Mr. Coppess. Thank you for the question, Senator.
    Oftentimes, our pricing structure on our farm is the more we
    buy, the cheaper it gets. I haven't personally experienced a
    rebate clawback, but it is very clear when we're purchasing
    products, that the more we buy, the cheaper the product gets,
    driving us down into, you know, we need to try and stack that
    to stay profitable limits our options.
        Chairman Grassley. Mr. LaVigne, your organization says on
    its website that your membership includes 85 percent of all
    private U.S. seed companies operating in the United States,
    both big and small. Is there a disagreement among your members
    regarding antitrust and intellectual property issues, laws, and
    enforcement?
        Mr. LaVigne. Thank you for that question, Mr. Chairman.
    We're pretty consistent with respect to intellectual property
    laws. It's a key pillar for our strategic plan, and it feels
    like that's where our companies make investments as technology
    continues to improve and we bring more products to farmers. We
    also believe very strongly that our members have their own
    strategies for how they implement intellectual property
    practices. We don't judge those by the companies. That's not
    our position as an association. So, whether they choose
    patents, or PVPs, or licensing, or just trade secrets, those
    are all tools that all innovators in the U.S. have available to
    them.
        Chairman Grassley. Yes. This question would be to Moss,
    Rosenbusch, and LaVigne. Only 1 of the 4 largest companies
    controlling the ag market is U.S. owned. In your opinion, does
    this represent any national security risk to our country?
        Dr. Moss. Thank you, Chairman. I'm happy to chime in on
    that. Having a concentrated market with just a few firms
    operating in that market, or a dominant firm, absolutely
    represents national security risks. Especially in food and
    agriculture, we've talked about market power bottlenecks where
    producers and consumers are at the behest of a very powerful
    company in terms of prices paid for commodities and prices paid
    for food. So, we have to be extra vigilant in food and
    agriculture to enforce our antitrust laws to ensure that we
    have competitive markets and the ability for smaller innovative
    entrants to get in and to have a go of it.
        Chairman Grassley. Yes. If you want to add to that or
    express your own view, I invite the two of you to do that as
    well.
        Mr. LaVigne. Thank you again, Mr. Chairman. When we look at
    this, we obviously have antitrust respect for the U.S. laws and
    for our own antitrust policies with the association, so we
    don't have a position with respect to how contracts are done or
    pricing is done, anything along those lines. From the member
    standpoint, we want very strong intellectual property rights.
    We know that the American market is one of the most competitive
    in the United States, and we would like to continue that
    process. This is where the innovation in our industry is done,
    and that's why we're the leaders globally. So, we would like to
    continue that as we go forward, and, hopefully, that
    competition continues to stay strong.
        Chairman Grassley. Do you have anything to add, Mr.
    Rosenbusch?
        Mr. Rosenbusch. Thank you, Chairman Grassley. I would just
    say that on the fertilizer side, most of the U.S. producers are
    U.S. owned.
        Chairman Grassley. Okay. For you, Mr. Rosenbusch, when a
    single foreign supplier dominates an essential input, and
    commerce and ITC-imposed duties that may choke off that source,
    what specific safeguards would the Fertilizer Institute support
    to prevent a de facto domestic monopoly and keep farmers
    supplied?
        Mr. Rosenbusch. Thank you, Chairman Grassley, for that
    question. The trade cases that you're referring to, they are
    complex and have been adjudicated through the International
    Trade Commission. At the Fertilizer Institute, we have both of
    those members on both sides of that case, so a wise man once
    told me, when you have two members on both sides of the issue,
    go with the member, and so we don't have an official policy on
    any of those trade remedy cases. I will tell you that there
    were many factors when that case came forward in 2020 that
    impacted the market and impacted the supply. A lot of those
    tons ended up being filled by Saudi Arabia and other countries.
        Chairman Grassley. We have some statements here from people
    that want to get into the record, statements and letters from
    several groups, including the Iowa Corn Growers Association. I
    am going to ask unanimous consent that those statements be put
    in, and there's nobody here to object.
        [Laughter.]
        [The information appears as submissions for the record.]
        Chairman Grassley. Dr. Moss, in plain English, where's the
    line between licensing that speeds innovation and licensing
    that walls off rivals, especially for stacked traits? Do you
    support narrowly tailored measures similar to the fair,
    reasonable, and nondiscriminatory agreements? If so, why?
        Dr. Moss. Thank you, Chairman Grassley. So, I think two
    things quickly in response to that question. Antitrust does a
    very difficult dance with intellectual property law. Our
    intellectual property laws are extremely important for spurring
    incentives to engage in R&D and to innovate products. But as
    we've seen in the pharmaceutical industry, there can absolutely
    be trouble ahead when firms use intellectual property rights to
    shape or to control how competition develops. We've seen that
    with product topping and generic seeds where generics have been
    kept out because of small changes in patents and another 20
    years of patent protection. So, that's the first answer. The
    second is, if we do get into the business of standard-setting
    organizations where the large biotech companies will be needing
    to figure out what the standards are, it will be a very complex
    and difficult process, given how much trait stacking there is.
    And determining what is a fair price for a license, of course,
    would be even more complex, and that will require a good deal
    of government oversight, and I would expect it would generate
    an enormous amount of controversy.
        Chairman Grassley. My last question will be to Mr. LaVigne
    and Dr. Moss. I want to understand why generic, insect-
    resistant traits haven't materialized despite patent
    expiration. I understand that there does not appear to be a
    single generic insect-resistant trait available to growers,
    notwithstanding frameworks touted as solutions. Why is this the
    case?
        Dr. Moss. My first response would be, again, the ag-biotech
    industry has borrowed a page from pharmaceuticals, filing for
    new patents based on very minor modifications, which then locks
    in another 20 years of patent protection and the ability to
    charge monopoly prices. The FTC currently has a case looking
    into loyalty discounts in pesticides. That is another way to
    lock farmers into cropping systems and limit the ability of
    farmers to switch. Lack of interoperability exacerbates this
    problem. So, we are nowhere near on top of these types of
    abuses of intellectual property that are really designed to
    stifle and to control competition.
        Chairman Grassley. Mr. LaVigne.
        Mr. LaVigne. Thank you, Mr. Chairman, and as we look at it,
    just to reiterate, we're not in the practice of collecting what
    the practices of the members are or how they license or charge
    fees. It's against American antitrust law, so I will make
    comment from the respect that we support products coming to
    market. This is much more difficult than other chemicals or
    pharmaceuticals or things along those lines that come to the
    marketplace after that expiration. You're looking at a lot of
    products where it may be the BT product, but you're also
    looking for stacks of other products with that. And then also
    newer varieties as they come along, is somebody going to want
    to stack that on a 20-year-old variety that's off patent, or do
    they want a new variety that is more resistant and has disease
    resistance in it? So, the plant-breeding process and the track-
    development process is an evolving process as we go along, and
    it's not just static. We're not planting the same seed
    varieties we did 20 years ago. We're trying to bring that
    newest product to the farmer. The asset has been involved in
    driving the ag accord to try to give that platform for generics
    coming to the marketplace, but it's been a challenge, and it's
    one that we need to continue to work with Congress and work
    with the administration, EPA, and USDA to try to provide that
    pathway for companies that choose to go to the generic traits
    and varieties.
        Chairman Grassley. Before I adjourn, I thank all of you for
    your contribution to this debate, and if you got anything you
    didn't get a chance to say, we'll take it in writing.
        Senator Durbin and I, as well as the entire Committee,
    would like to thank each witness for taking the time to share
    their knowledge and expertise.
        Written questions can be submitted for the record for 1
    week from today, and I'll ask the witnesses to answer and
    return the questions to the Committee within 2 weeks after you
    receive them.
        Chairman Grassley. Thank you very much. Meeting adjourned.
        [Whereupon, at 12:20 p.m., the hearing was adjourned.]
        [Additional material submitted for the record follows.]

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                                A P P E N D I X

    The following submissions are available at:

      https://www.govinfo.gov/content/pkg/CHRG-119shrg62935/pdf/CHRG-119shrg
        62935-add1.pdf

    Submitted by Chairman Grassley:

     ACT | The App Association, letter................................     2

     INARI, statement.................................................     6

     Mueller, Mark, statement.........................................     8

                                     [all]