Arguing Class Actions is a monthly column by Adam J. Levitt for the National Law Journal.
Reprinted with permission from the September 8, 2026, edition of the National Law Journal. © 2026 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.
Scarcity isn’t an antitrust violation. Neither is a high price. Wars create shortages, supply chains break, input costs rise, and competitors in concentrated markets can independently decide that producing more would be bad for business. Section 1 of the Sherman Act prohibits agreements in restraint of trade, not firms independently making the same rational decision at the same time. But scarcity can also be manufactured, and, sometimes, the most revealing evidence of how a market is functioning is the competitive act that never occurs. Prices soar, margins expand, producers have available capacity, yet nobody meaningfully increases output, aggressively takes share, or breaks ranks. Then the disruption that supposedly caused the scarcity recedes, but the restraint continues and prices remain stubbornly high. While none of that, standing alone, establishes a conspiracy, it does, however, raise a question at the heart of antitrust law: Where is the competition?
That question has particular force in concentrated commodity markets, and today’s agricultural markets provide an unusually good place to examine it. The legal starting point is familiar. Bell Atlantic v. Twombly teaches that conscious parallelism generally isn’t conspiracy. Firms in an oligopoly watch one another, understanding that their decisions affect their competitors and vice versa. Several producers, therefore, can independently conclude that increasing output will depress prices and that each is better off exercising restraint. Parallel behavior does not, by itself, establish the agreement that Section 1 requires.
But Twombly doesn’t end the inquiry; it frames it. The important question isn’t simply whether competitors behaved alike, but why. Because unlawful agreements among sophisticated competitors rarely come memorialized in writing, conspiracy can be established circumstantially, and parallel conduct matters when the surrounding circumstances make coordination a more persuasive explanation than independent decision-making. That’s the real function of the familiar “plus factors.” They aren’t an antitrust scavenger hunt in which concentration, barriers to entry, opportunities to communicate and conduct against self-interest each earn a check mark. Rather, they’re evidence that can help explain why a market behaved as it did.
Output restraint makes that inquiry especially revealing, because high prices ordinarily summon competition. They give existing producers an incentive to sell more, rivals an opportunity to steal market share, and potential market entrants a reason to enter. The resulting supply places downward pressure on price. That’s one of the basic mechanisms through which competitive markets correct scarcity, which makes the absence of that response significant. One producer may have any number of legitimate reasons not to increase production when prices rise, and several oligopolists may independently conclude that protecting margins is more profitable than chasing volume. But if prices remain extraordinarily attractive, capacity is available and every important producer nevertheless continues to exercise restraint, the question becomes harder: Why does nobody take the money?
That question is particularly salient in today’s fertilizer markets. A series of recently filed antitrust complaints, which the Judicial Panel on Multidistrict Litigation has centralized before Judge Eric Melgren in the U.S. District Court for the District of Kansas, alleges that four producers control approximately 80% of U.S. nitrogen fertilizer, while two producers control approximately 90% of phosphorus fertilizer and potash. Beginning in 2021, fertilizer prices departed dramatically from historical norms; during the 2021–22 spike, U.S. farmers allegedly paid more than 60% more for fertilizer, adding an estimated $128,000 in costs for a feed-grain farm in 2022. The most interesting allegations concern the competitive response to these numbers: Producers allegedly curtailed production and idled available capacity, delayed or limited expansion despite record prices, managed inventories to preserve scarcity, and failed to expand output meaningfully as prices rose. The complaints describe the strategy as “capacity discipline” and the result as “managed scarcity.”
The phrases are evocative, but the economics matter more. In a competitive market, unusually attractive prices should tempt somebody to defect from restraint. Indeed, that temptation is one of the inherent difficulties in maintaining a cartel. If everyone else restricts supply while one producer sells more, the defector captures additional sales at the elevated price that the collective restraint helped create. The incentive to cheat is not a defect in competitive markets; it’s competition doing its job. When nobody cheats, therefore, antitrust law properly asks why.
The answer cannot simply be that restraint was profitable, although, in an oligopoly, it may well have been. What matters is whether other evidence helps explain why competitors could maintain a pattern that each had an incentive to disrupt. Communications about output or capacity, visibility into competitors’ inventories or production, forward-looking signals about future behavior, and mechanisms for detecting deviation can change the significance of conduct that otherwise remains ambiguous because they can reduce the uncertainty that ordinarily makes coordinated restraint unstable.
That’s why information exchange can matter so much in concentrated commodity markets. Legitimate joint ventures, trade associations, and benchmarking arrangements can generate real efficiencies, and information sharing is not necessarily synonymous with collusion. But competitively sensitive information is not all alike. Current, firm-specific information about price, production, capacity, inventories or future plans can tell a competitor something fundamentally different from aggregated historical data: whether its rivals are likely to remain restrained if it does.
The fertilizer allegations again illustrate the point. Two dominant potash producers jointly own Canpotex, an export marketing organization through which they collectively market Canadian potash outside North America. The complaint alleges that Canpotex collects information concerning production, inventories, demand, pricing conditions and shipment logistics and coordinates export volumes and shipment schedules. Although Canpotex doesn’t export potash into the United States, plaintiffs allege that the arrangement creates opportunities for its owners to exchange competitively sensitive information and align their pricing and supply strategies here. Whether those allegations ultimately prove anything unlawful is a litigation question. Analytically, however, they illustrate why a producer deciding whether to expand output is in a different position when it must guess what its competitors will do, rather than when uncertainty about their conduct has been reduced.
Market structure matters for very much the same reason. Concentration isn’t a proxy for conspiracy, but coordination among two or four dominant producers is easier to establish and monitor than coordination among dozens. Barriers to entry matter because incumbent restraint cannot preserve supracompetitive prices if new competitors can readily enter and undercut them. The fertilizer complaints allege both unusual concentration and substantial financial, regulatory, operational, and logistical barriers to entry, including HHIs of 3,455 for potash, 2,382 for nitrogen fertilizer and 4,553 for phosphate fertilizer. None of those facts alone establishes agreement. Instead, they tell us something about the economic environment in which the alleged restraint occurred and whether that restraint could endure without being disrupted from within or outside the market.
And endurance may be the most interesting part of the analysis. Commodity markets experience shocks all the time. Wars interrupt supply, sanctions remove producers, energy prices spike, transportation systems fail, and demand changes unexpectedly. But the cause of scarcity and the persistence of scarcity present different antitrust questions. While an external shock can explain why prices rise, it doesn’t necessarily explain why competition fails to bring them back down. If the disruption recedes, input costs fall, supply returns, and unused capacity remains available, yesterday’s explanation becomes progressively less useful in explaining today’s price. At some point, the inquiry shifts from why prices rose to why competition didn’t respond.
That temporal distinction is particularly important in circumstantial conspiracy cases. A competitive market can be knocked out of equilibrium by an external event without anyone doing anything wrong. But competition ordinarily reacts to opportunity. If the conditions producing the original shock change while producers continue to restrain output and prices remain elevated, the persistence itself becomes something requiring explanation. Put more simply, a shock may explain the scarcity; it doesn’t necessarily explain the failure of competition to cure it. The fertilizer complaints allege precisely that disconnect: Prices allegedly remained elevated after some asserted supply disruptions subsided, nitrogen fertilizer remained expensive even when natural-gas prices were relatively low, and the restoration of Belarusian potash supply produced only a muted price response. The important question isn’t whether the original disruptions were real. Rather, it’s whether they continue to explain the market after the underlying conditions change.
Agriculture makes these questions particularly consequential because competition matters on both sides of the farm gate. On one side are the markets in which farmers buy what they need to produce—fertilizer, seed, equipment, and other inputs. On the other side are the markets in which they sell crops and livestock to processors and purchasers. Private antitrust cases involving poultry, pork, and other agricultural products have challenged alleged coordination further down that chain; peanut farmers, for example, have alleged that dominant shellers conspired to suppress what farmers received for their crops. Fertilizer presents the other side of the same problem: alleged coordination involving an essential product that farmers must purchase before there’s anything to harvest. Antitrust failures on either side can extract value from the farmer; failures on both sides can trap the farmer between them. And the consequences need not remain at the farm gate, because higher agricultural input costs and distortions further down the supply chain can ultimately reach consumers buying food.
That helps explain why competition in agriculture has remained an unusually bipartisan antitrust concern. Administrations of both parties and state enforcers across the political spectrum have scrutinized competition involving meat processing, seed, fertilizer and other agricultural markets. The theories and priorities vary, but the central premise has endured: Markets for essential agricultural products need competition no less than markets for anything else. The point isn’t that agriculture deserves a special antitrust rule. Rather, it’s that the consequences of failed competition in agriculture are unusually visible, extending from the price of the inputs necessary to plant a field to the price consumers that eventually pay for what it produces.
Government enforcement, nevertheless, has limits, particularly when the central question is why competitors made decisions that appear economically ambiguous from the outside. Public prices can tell us what happened. Economists can assess whether what happened departed from competitive expectations. Market structure can show whether coordination was feasible. But none of those necessarily tells us why a producer left capacity idle, why an expansion was postponed, what executives understood competitors would do, or what information passed among them. That evidence lives elsewhere—in internal forecasts, capacity analyses, board presentations, emails, texts, and communications among competitors. Public markets show the result; discovery can reveal the explanation.
That’s one reason why private antitrust enforcement matters so much in these markets. Private litigation doesn’t merely compensate victims after government has identified a violation. In circumstantial conspiracy cases, it can actually provide the mechanism for determining whether a violation occurred in the first place. When lawful oligopolistic interdependence and unlawful coordination can produce similar results visible from outside the market, discovery can expose the facts that distinguish one from the other. The private antitrust bar, therefore, does more than pursue damages after misconduct has been uncovered; it can perform the difficult work necessary to determine whether apparently parallel market behavior was truly independent at all.
Of course, none of this, standing alone, turns “supply discipline” into an antitrust offense. High prices don’t necessarily establish conspiracy, concentration doesn’t necessarily establish conspiracy, and information exchange doesn’t necessarily establish conspiracy. But antitrust law should be equally wary of the opposite shortcut: treating parallel conduct as effectively self-explanatory because each competitor’s behavior can be rationalized in isolation. The relevant question is thus not whether lawyers or economists can imagine an independent explanation for each piece of evidence, but, rather, whether the evidence, considered together and in its economic context, more persuasively describes independent competition or coordinated restraint.
Sometimes the best evidence lies in what the market does; while sometimes it lies in what the market conspicuously fails to do. When prices rise, margins expand and capacity is available, competition ordinarily gives somebody a reason to pursue the opportunity. If nobody does, that doesn’t answer the antitrust question, but it certainly asks one. And, if the pattern persists after the circumstances supposedly responsible for it have changed, the questions multiply: Why did no competitor take share? Why did available capacity remain unused? Why did additional supply fail to discipline price? What, if anything, did competitors know about one another that made continued restraint possible?
Agriculture puts real stakes behind those questions because competition affects what farmers pay to plant their fields, what they receive when they harvest them and, ultimately, what everyone else pays to eat. Antitrust law should neither presume conspiracy because scarcity exists nor presume competition because each firm’s conduct can be explained in isolation. Its harder, and more important, job is to determine why the market behaved as it did. Scarcity may begin that inquiry, but when competition should be the cure and the cure never comes, the absence of competition may be the most important fact of all.
Adam J. Levitt is a founding partner of DiCello Levitt, where he heads the firm’s class action and public client practice groups. He can be reached at alevitt@dicellolevitt.com.
