After just coming out of a drought this summer, Saskatchewan farmers are now facing another challenge: higher costs for fertilizer.
Mike Floer, who farms in Minton, Sask., said he paid close to double what he usually pays for fertilizer.
“It definitely affects our bottom line. When expenses go up as long as income stays up, everything works. But when commodity prices go back down and fertilizer prices are still at record highs, it’s not a fun day to be a farmer.”
Fertilizer helps farmers get off to a good start by supplying nutrients throughout the season, said Agricultural Producers Association of Saskatchewan (APAS) president Todd Lewis.
“Without fertilizer you have reduced yields, and in many cases drastically reduced yields and so it is a big component of sustainable agriculture here in the province,” Lewis added.
Fertilizer is a global commodity sold around the world, so there tends to be a global price structure for it, Clyde Graham with Fertilizer Canada explained.
Graham added the price is driven by supply and demand.
“The price of fertilizer tends to be primarily driven by demand by farmers. One of the major factors right now is there’s very strong prices for grains and seeds, and so farmers in many parts of the world are looking to get fertilizer to maximize their production,” Graham said.
He added farmers are taking advantage of high prices for crops like corn, canola, wheat and barley.
“Part of the reason those crops are quite high is that the stocks or inventories of those grains and oilseeds are currently quite low by historical standards and so that tends to drive up the price for grains and oilseeds and then increase the demand for fertilizer,” Graham added.
There are four major kinds of fertilizers that farmers use: nitrogen, phosphate, potash and sulfur.
Along with demand for fertilizer, Graham explained that there have been challenges producing fertilizer globally.
One of Canada’s major nitrogen plants was down this fall, and there have been disruptions in a production area in the United States as well.
There have also been weather-related issues for phosphate production in Florida.
“In Europe there’s been a significant market disruption with natural gas which is a key component of fertilizer manufacturing and then in Russia and China, which normally export a lot of fertilizer, (they) are keeping that fertilizer internally right now,” Graham explained.
Floer said the most frustrating part for farmers is that the situation is out of their control.
“Yet we’re the ones who have to write the cheques for high-priced inputs,” he told Global News.
Lewis said this rise in price is huge for growers.
“It’s come at a time when for a lot of producers, it’s going to create a real cash crunch going into spring,” Lewis said.
“Unfortunately, their income is down and low with last year’s drought and now to put a crop in next spring is going to cost significantly more.”
Lewis said producers may turn to other crops, adding that there are other options in Saskatchewan.
“Canola is a crop that typically uses a lot of nitrogen. You may get away with using a little bit less in a crop like spring wheat or durum,” Lewis explained.
“There’s also some nutrients left in the ground in the areas that didn’t have much rainfall last year and of course last year’s crop was put in with a full nutrient package and in some cases there are some of those nutrients remaining in the ground for next year.”
Graham’s advice for farmers is to keep in close contact with the agri-retailer that supplies them with the fertilizer, pesticide seeds or other crop inputs.
“They’re going to be the best source of information about where the market’s going,” Graham said.
Graham suggests farmers speak to their agri-retailer about what kind of crops they are growing and their fertilizer needs to figure out the best way to work out supply.
“We certainly understand the frustration of growers who are dealing with the current market conditions,” Graham said.
“I think our industry is doing everything it can to make sure that farmers have access to products this spring in time for spring seeding and that any supply issues are corrected as soon as they can be.”
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