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Federal mineral strategy to benefit Midwest farmers

Having Michigan as source of world’s highest-grade potash ore will reduce dependency on imports.

Potash is the source of potassium metal and also potassium, a nutritional requirement and important fertilizer that has no known substitutes. Used by farmers as well as in the manufacturing of batteries, steel and many other industrial processes, it is the only strategic and critical mineral principally responsible for food security and the food supply. However, the U.S. currently imports approximately 95% of its needs.

Now, however, the U.S. government has released a federal strategy aimed at ensuring secure supplies of critical minerals and supply chain resilience, including potash. The federal strategy includes a collaborative effort of the U.S. Department of Agriculture, the U.S. Department of the Interior, the U.S. Department of Commerce, the U.S. Department of Defense and the U.S. Department of Homeland Security designed "to reduce risks for American businesses that rely on critical minerals, create a favorable U.S. business climate for production facilities at different stages of critical mineral supply chains and support the economic security and national defense of the United States -- all of which will reduce the nation's vulnerability to critical mineral supply disruptions."

Still, U.S. farmers are more vulnerable to emergent competitive countries, consumer concentration risk and the highest level of reliance on imported potash since World War I. This is occurring during a time when the world seeks ways to improve agricultural yields due to increased population growth.

As the U.S. negotiates for a balanced trade environment, farmers have borne the brunt of reciprocal retaliatory actions from China as it shifts purchasing power toward Brazil and other competitive food growers.

"The greatest casualty has been our farmer, who is experiencing reduced purchases from China and increased potash tax from Canada. They are caught in the middle," said Ted Pagano, founder and chief executive officer of Michigan Potash & Salt Co. (MPSC).

Pagano made a mineral discovery in 2012. Pagano is a potash geologist who, in collaboration with Western Michigan University, identified the world's highest-grade potash ore located more than a mile beneath the surface in western rural Michigan -- in immediate proximity to the U.S. Corn Belt, which has the greatest need for the mineral. The significance of the discovery spurred a presentation before Congress in 2014 and later became a featured topic for the U.S. Geological Survey, which estimated the value of the deposit to be $65 billion.

After eight years in the making, MPSC announced earlier this year a construction agreement with Barton Malow for the engineering, procurement and construction of the Michigan Potash & Salt facility in western rural Michigan. The project is expected to create approximately 300 construction jobs and more than 150 direct full-time jobs while also paying royalties and creating a new industrial tax base in economically distressed rural community.

"Michigan Potash has the ability to answer a pressing domestic necessity. Production leads to reduced foreign reliance, improves trade balance, provides national food security, protects consumer welfare while creating new gross domestic product," said Rick Johnson, a cash crop farmer and former Michigan speaker of the House.

MPSC vice president Ward Forquer said, “It is of great importance that federal initiatives have pre-eminently identified the production and commercial distribution of fertilizer as necessary. Michigan -- and Michigan alone -- uniquely lends infrastructural and distribution strength to U.S. commercial fertilizer networks given its advantaged location."

TAGS: Business
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