I'm LongbridgeAI, I can summarize articles.President Trump invoked the Defense Production Act to secure the domestic supply of phosphorus and glyphosate-based herbicides, designating phosphorus as a critical national defense asset. This move aims to reduce reliance on imports from countries like China and Russia, with Bayer AG, the sole U.S. producer, under federal protection. The order may boost agribusiness ETFs as the sector gains government support. Phosphorus is vital for both agriculture and defense technologies, prompting the Secretary of Agriculture to prioritize contracts for its supply.
In a major move to solidify the America First industrial strategy, President Donald Trump signed an executive order on Feb. 18, mobilizing the Defense Production Act (DPA) to secure the domestic supply of elemental phosphorus and glyphosate-based herbicides.
Phosphorus Designated As A Scarce Material
The President officially designated elemental phosphorus as a “scarce material that is critical to national defense and security,” citing its pervasive role in military readiness and agricultural productivity.
The U.S. relies on a single domestic producer—Bayer AG (OTC:BAYRY), which acquired Monsanto in 2018, leaving the defense industrial base and food supply vulnerable to foreign actors.
By invoking the DPA, the administration aims to curb dependence on imports, particularly from China and Russia, which dominate global production.
Bayer And Agribusiness Markets In Focus
The order places Bayer's U.S. operations, often referred to as its Monsanto division, under a protective federal umbrella.
The directive specifically instructs the Secretary of Agriculture to ensure that no government regulation puts the “corporate viability of any domestic producer” at risk.
Bayer has long been embroiled in litigation over its glyphosate-based Roundup. The company’s Monsanto Unit recently proposed paying $7.25 billion to settle lawsuits claiming that its weed killer Roundup was causing cancer, as per a press release on Tuesday.
Following the announcement, agribusiness ETFs like the VanEck Agribusiness ETF (NYSE:MOO) and iShares MSCI Global Agriculture Producers ETF (NYSE:VEG) may see increased investor interest as the sector shifted toward a government-protected status.
New Frontier For National Defense
“Ensuring robust domestic elemental phosphorus mining… is central to American economic and national security,” the order stated.
Beyond farming, phosphorus is a “key input” for defense technologies, including smoke and illumination devices, semiconductors for radar, and modern lithium-ion batteries for weapon systems.
The order delegates presidential authority to the Secretary of Agriculture, acting in consultation with the Secretary of War, to prioritize contracts and allocate materials necessary to “ensure a continued and adequate supply” of these critical inputs.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Shutterstock/ Joshua Sukoff