I’m sipping my coffee and reading about the latest trade war drama, and folks, I almost spilled my coffee reading this one. President Donald Trump is trying to convince us that he’s found an alternative to Canada’s potash, a crucial fertilizer component, and it’s coming from… Belarus? Yeah, because that’s exactly what American farmers need, a strongman ally of Vladimir Putin as their new potash supplier. Bless their hearts. The article says that Trump suggested this week he’s working on a “massive Deal” to buy potash from Belarus at a much cheaper price than Canada, which supplied about 90% of US potash imports last year.
But here’s the thing, Trump’s scramble to tout the US talks with Belarus underscores the pressure from American farmers, who are slammed by surging diesel and fertilizer costs linked to the war with Iran. And let’s be real, Belarusian President Alexander Lukashenko has already said that his country cannot supply large volumes of potash to the United States because its supplies have already been spoken for this year. You can’t make this stuff up, folks.
The United States slapped a 50% tariff on many goods from Canada this summer, but critical imports like potash, crude oil, and electricity were spared. Trump’s trying to find a way to reduce America’s reliance on Canadian potash, but it’s not going to be easy. Some analysts doubt a deal with Belarus would alleviate America’s long-standing reliance on Canadian potash, and the logistics of shipping it to the United States would be “challenging.” Chris Krueger, global head of macro research at TD Cowen Washington Research Group, noted that Belarusian potash is already largely committed to Asia, and the costs of removing it would be prohibitively expensive.
Alexis Maxwell, senior analyst at Bloomberg Intelligence, estimates that it would cost about $200 per metric ton for Belarus to deliver potash to the United States before profit margins, which is sharply higher than the $130-per-metric-ton cost for potash from Canada. Scott Lincicome, vice president of the libertarian think tank Cato Institute, was more blunt, saying that if you can’t laugh at the president desperately promising angry farmers that he’ll magically replace massive quantities of fertilizer from our next-door military ally with small imaginary quantities from a tinpot authoritarian thousands of miles away, then you simply have no sense of humor.
Businesses are already grappling with supply chain turmoil and price hikes unleashed by the Iran war. Anything that makes it harder or more expensive to purchase Canada’s potash would make matters worse. Nitrogen-based fertilizer prices increased by 22% year-over-year in August, according to the Bureau of Labor Statistics’ producer price index. Producer prices on diesel, a critical fuel that powers trucks, tractors, and trains, surged by 78% in August, and that trend is not likely to fade as diesel continues to hit all-time highs in September.
Goldman Sachs warned clients earlier this month that global food prices are at risk of going sharply higher due in part to soaring diesel and fertilizer costs linked to the Strait of Hormuz crisis. So, in conclusion, it seems like Trump’s plan to replace Canadian potash with Belarusian potash is a bit of a stretch. I mean, who needs a reliable and nearby supplier when you can have a sanctioned nation thousands of miles away, right? It’s like trying to replace your local coffee shop with a coffee shop on the moon. Not gonna happen, folks. And that’s why I’m sticking to my local coffee shop, where the coffee is hot and the news is always entertaining.
Armchair patriot. Believes in the free market, cold beer, and that there’s always a guy named George behind every CNN segment.
Former remote-throwing champion turned #1 couch commentator on liberal panic in the media. Born in Texas (or so his mug says), he earned a degree in Fake Newsology & Beer Philosophy from YouTube University.
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