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The U.S. Department of Agriculture announced an investment of $500 million into a grant program to increase American-made fertilizer production to spur competition and combat price hikes on U.S. farmers caused by the war in Ukraine. The Biden administration’s Fertilizer Production Expansion Program (FPEP) is part of an effort to promote competition in agricultural markets. Grants will be used to support independent, innovative and sustainable American fertilizer production to supply American farmers. Funds also will expand the manufacturing and processing of fertilizer and nutrient alternatives in the U.S. and its territories.

Who is eligible to apply? Eligible entities are for‐profit businesses and corporations, nonprofit entities, Tribes and Tribal organizations, producer‐owned cooperatives and corporations, certified benefit corporations, and state or local governments. Private entities must be independently owned and operated to apply.

How can grant funds be used? Grant funds must be used to increase or otherwise expand the manufacturing and processing of fertilizer and nutrient alternatives in the United States and its territories. Funds can support activities such as:

• Construction of a new facility or purchase of an existing facility for purposes of expanding capacity or increasing output, including the purchase of land; 
• Pre-development costs including, but not limited to, engineering and other professional fees;
• Working capital to support expanded capacity or increased outputs;
• Modernizing or expanding an existing facility, including expansion and modifications to existing buildings and construction of new buildings at existing facilities;
• Purchasing new, or modernizing existing processing and manufacturing equipment; 
• Customizing, and installing equipment, devices, and technology that improves processing functions, worker conditions, or safety; 
• Modernizing, customizing, and installing climate‐smart equipment that reduces greenhouse gas emissions, increases fertilizer use efficiency, improves air and water quality, or meets one or more of USDA’s climate action goals; 
• Ensuring compliance with packaging and labeling requirements under applicable law (including sealing, packaging, boxing, labeling, conveying, and product moving equipment); 
• Ensuring compliance with occupational and other safety requirements under applicable law; 
• Engaging in workforce recruitment, training, apprenticeships, and retention to ensure expansion projects will be adequately staffed and crewed and offer opportunities to workers. 

What are the anticipated award amounts? USDA expects to award grants in the range of $1 million to $100 million for grant periods of up to five years.

What are some other requirements? FPEP will support the production of agricultural commodities through the manufacturing and processing of fertilizer, nutrient alternatives, and other nutrient management products and technologies that are:

• Independent and outside the dominant fertilizer suppliers.  The goal is to increase competition.  Consequently, entities that hold a market share (in either manufacturing, processing, or distribution) that is greater than or equal to the entity that holds the fourth largest share of the market for Nitrogen, or Phosphate, or Potash, or any combination of the three, will not be considered for funding;
• Made in America - produced in the United States by companies operating in the U.S. and territories, creating good-paying jobs at home and reducing the reliance on potentially unstable or inconsistent foreign supplies;
• Innovative – to improve upon fertilizer production methods and efficient-use technologies to jump start the next generation of fertilizers, nutrient alternatives, and other nutrient management products;
• Sustainable - reduces the greenhouse gas impact of transportation, production, and use through renewable energy sources, feedstocks, formulations, and incentivizing greater precision in fertilizer use; and
• Farmer-focused - like other Commodity Credit Corporation investments, a driving factor will be providing support and opportunities for U.S. agricultural commodity producers.

When is the deadline to apply? USDA is offering two opportunities for submission. The department plans for a 45-day application window for applicants to receive priority for projects that increase the availability of fertilizer (nitrogen, phosphate or potash) and nutrient alternatives for agricultural producers to use in crop years 2023 or 2024. The deadline for applications submitted into the first window is November 14, 2022.

USDA will also offer an extended application window, providing an additional 45 days (90-day application window) to receive applications for financial assistance to significantly increase American-made fertilizer production to spur competition and combat price hikes. This extended application window will support applicants who need more time to make additional capacity available, and that application deadline is December 29, 2022.

Morrison has extensive experience writing successful applications for clients for USDA programs. For more information on this grant or how to apply with Morrison’s assistance, please contact the Morrison Grants Team by email at grants@morrisonco.net or call us at 530-893-4764.