Sask. farmers grapple with high fertilizer prices

PRINCE ALBERT -

As Saskatchewan farmers hope to rebound from last year's drought they need to contend with climbing fertilizer prices.

Regina area farmer Bill Gehl told CTV News the prices of nitrogen, phosphate and anhydrous ammonia have doubled or nearly tripled for some products.

“It’s not like the prices of fertilizer haven’t been volatile in the past, because it has but this one is extraordinary and really couldn’t come at the worst time for many people,” Gehl said.

He says without fertilizer, yields are much lower and fertilizer has also been in short supply at local dealers.

“We’re captive as farmers and we need those inputs,” said Gehl.

In his area, he says some farmers are faced with poor crop yields due to drought last year and some farmers have to pay back grain contracts that they couldn’t deliver on which has left some producers struggling financially.

“It makes me wonder as a farmer: who are governments concerned about, just the shareholders or the rest of us the people who actually produce the grains, that produce the fertilizers, that truck it,” said Gehl.

He says he’d like more government regulation of the fertilizer industry similar to the transportation industry.

The National Farmers Union (NFU) shares Gehl's concerns and has written to the House of Commons Agriculture Committee to investigate the sharp price increase in fertilizer prices.

“Fertilizer prices have skyrocketed over the past six months and we want to know why,” said, Don Ciparis, the president of the NFU in Ontario.

The NFU says their members report fertilizer prices increasing from anywhere between 144 and 220 per cent since this time last year.

“How does a product cost the company $500 a tonne to produce suddenly become $2,300 a ton exiting the plant?” asked NFU director and board member Doug Scott.

Scott said he believes concentrated ownership of fertilizer production provides companies with an opportunity to manipulate the amount they charge for their products.

“There’s a monopoly on the production of fertilizer in North America and the world,” said Scott.

“There’s no competition in the industry.”

Fertilizer Canada Executive Vice President Clyde Graham said in a statement that Canada has a vibrant and competitive fertilizer industry and operates in a global marketplace, which is driven by supply and demand.

"Canada is the world’s largest exporter of fertilizer but is also a major importer of crop nutrients. Fertilizer Canada has more than 40 member companies engaged in the manufacturing, import, export, distribution and retail of fertilizer products. The International Fertilizer Association has a membership of over 430 fertilizer companies and other entities.”

Edwards School of Business professor and analyst Brooke Dobni said fertilizer prices are influenced by global commodity prices and supply and demand.

Dobni says potash producers were ahead of global demand in the past and had stockpiled supplies. However, this is now changing.

“They've drawn on that supply and now supply and demand are reaching equilibrium. There’s still a bit of an overhang. The other things that are affecting price are global uncertainty and supply chain issues,” said Dobni.

In a statement to CTV News, Marie-Claude Bibeau Agriculture and Agri-Food Canada Minister Marie-Claude Bibeau said there were several drivers for the increase.

Those include strong global demand for fertilizer driven by higher crop prices, trade and supply chain disruptions which were exacerbated by COVID-19 and higher transportation costs.

“Depending on the crop, the farm location, local weather, soil type, and other farm-specific characteristics, more targeted fertilizer use and other practices that reduce emissions from fertilizer application have the potential to help reduce costs and increase yields,” said Agriculture and Agri-Food Canada.

According to Agri-Food Canada, fertilizer prices are forecast to continue to increase in 2022 as the strong fertilizer demand and the disrupted supply will continue to put upward pressure on the fertilizer prices.