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Fertilizer supply shortage and price hike leads to concern for N.B. farmers

Click to play video: 'N.B. farmers brace for high fertilizer costs' N.B. farmers brace for high fertilizer costs
WATCH: Amid sanctions in Russia, fertilizer is becoming more expensive and supply is scarce. One farmer in New Brunswick says the price he’s paying has doubled in a year. Nathalie Sturgeon reports on what the industry is facing ahead of planting season. – Apr 19, 2022

Mike Slocum is bracing for fertilizer prices.

He owns Slocum’s Farm Fresh Produce Ltd in Grand Lake, N.B., and says his suppliers have told him to prepare for prices to double what he paid the year before, or about $1,400 per tonne.

His farm used about 30 tonnes a year and said it will be reflected in the prices for his customers.

“It’s going to make it challenging,” he said in an interview by phone on Tuesday. “We don’t know how much we (have) to increase the price until the exact bill comes in, but I mean, it’s going to add price to it and how much is the consumer going to stand, price wise.”

Slocum said he also has to maintain his competitiveness with other producers and farmers because if his prices are too high, he won’t sell.

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“Just bringing everything in, even fuels gone up,” he said.

Read more: Fertilizer shortage puts world food supply at risk as sanctions nip Russia

Sanctions on Russia, who is a major exporter of potash, ammonia, urea and other soil nutrients, have disrupted shipments of those key inputs around the world.

Karen Proud, the president and CEO of Fertilizer Canada, said issues began about a year ago but have been further complicated by the invasion of Ukraine by Russia.

She said about 85 to 95 per cent of the fertilizer shipped to Canada’s east coast is from Russia. About 60 per cent had landed in the country prior to the invasion and the remainder is under sanctions.

“Our Canadian importers, in some cases, had to cancel contracts they had with Russian suppliers, and try to source fertilizer elsewhere. It’s not easy this close to seeding season to get that supply into Canada,” she said in an interview Tuesday.

Canada does hold its weight, though, when it comes to producing fertilizer with some of the most advanced producing facilities in the world, Proud said.

“We’re still concerned about the supply,” she said. “Canada is the number producer of potash in the world, second and third are Russia and Belarus, so obviously Canada is seen as a reliable, dependable source of products such as potash.”

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Proud said Canada can do more though, adding there needs to be a long-term look at the supply of fertilizers and the country’s role in that.

“Canada also has some of the most modern facilities for manufacturing fertilizer products that are much more environmentally friendly than some of our global competitors,” she said.

She said the tariffs that are imposed on the fertilizer currently in the country also need to be addressed. Proud said the organization is in discussion with the federal government on those tariffs and said they seem open to loosening them to help with the crunch.

Potash history in New Brunswick

New Brunswick does have its own potash mine.

In 2016, Nutrien, or formerly the PotAsh Corp, was shut down, citing high operational costs by the company. It remains active with a contract from the provincial government for road salt.

The recent trouble with fertilizer has led to speculation that the potash mine may re-open amid a push for greater demand from Canada, but the company says there are no plans to re-start potash production in New Brunswick.

“The provincial government has extended the existing contract with Nutrien and its mine in the Sussex region for the supply of road salt,” said a spokesperson for the company by email.

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Read more: 60% of Canadians worry about feeding their families amid inflation: Ipsos poll

On March 16, the company announced it would increase production capability this year to approximately 15 million tonnes in response to the uncertainty in Eastern Europe.

“The majority of this additional volume is expected to be delivered in the second half of the year and the additional volume will come from our six low-cost potash mine sites across Saskatchewan,” the company said in an email statement.

There are several local fertilizer producers in the province as well, including Cavendish Agri Services, which has operations in all three Maritime provinces, and McCain Fertilizer Ltd in Florenceville-Bristol.

Government response

The New Brunswick Department of Agriculture, Aquaculture and Fisheries said in an email it is aware of the concerns being brought forward by the industry but says it is too early to predict the potential impacts.

“Most fertilizers used by New Brunswick farmers are purchased locally, but the fertilizer elements are generally sourced from foreign countries,” a spokesperson for the department said in an email statement.

It said purchasing and distributing fertilizer is done business to business, and the government is not involved in that process. However, farmers “impacted by supply availability are encouraged to reach out to the department to speak with technical advisory staff to discuss alternative options.”

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The Department of Natural Resources and Energy Development also said it recognizes there is a global shortage of potash.

“The Department of Natural Resources and Energy Development is monitoring developments in market conditions closely and is in regular communication with Nutrien,” said an email statement by the department.

Click to play video: 'Farmers grappling with rising feed and fertilizer costs' Farmers grappling with rising feed and fertilizer costs
Farmers grappling with rising feed and fertilizer costs – Apr 10, 2022

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