Saskatchewan farmers faced with higher fertilizer costs: ‘It definitely affects our bottom line’

Coming out of a drought this summer, Saskatchewan farmers now face another challenge: rising fertilizer costs.

Mike Flor, who grows in Menton, Saske, said he paid nearly double what he normally pays for fertilizer.

“It definitely affects our bottom line. When expenses go up as long as income remains constant, everything works. But when commodity prices are going down and fertilizer prices are at record levels, it’s not a fun day to be a farmer.”

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Fertilizer helps farmers get off to a good start by providing nutrients throughout the season, said Todd Lewis, president of the Association of Agricultural Producers of Saskatchewan (APAS).

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“Without fertilizer, it reduced yield, and in many cases reduced yield significantly, so it’s a huge component of sustainable agriculture here in the county,” Lewis added.

Clyde Graham of Fertilizer Canada explained that fertilizers are a global commodity sold all over the world, so they tend to have a global price structure.

Graham added that the price is driven by supply and demand.

Fertilizer prices tend to be driven primarily by demand from farmers. “One of the main factors right now is that there are very high prices for grains and seeds, so farmers in many parts of the world are looking for fertilizer to maximize their production,” Graham said.

He added that farmers are taking advantage of the high prices of crops such as corn, canola, wheat and barley.

“Part of the reason these crops are so high is that stocks or stocks of those grains and oilseeds are currently very low by historical standards, and so that drives up prices for grains and oilseeds and then increases the demand for fertilizer,” Graham added.

There are four main types of fertilizers that farmers use: nitrogen, phosphate, potash and sulfur.

Besides the demand for fertilizers, Graham explained that there have been challenges in fertilizer production globally.

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One of Canada’s major nitrogen plants was out of order this fall, and there were disruptions to the US production area as well.

There have also been weather-related issues for phosphate production in Florida.

“In Europe, there was a lot of market disruption with natural gas which is a major component of fertilizer manufacturing, and then in Russia and China, which usually export a lot of fertilizer, (they) keep that fertilizer internally at the moment,” Graham explained.

The most frustrating part for the farmers, Fleur said, is that the situation is out of their control.

“However, we are the ones who have to write the checks for the expensive inputs,” he told Global News.

That price hike is huge for farmers, Lewis said.

“The time has come when a lot of producers are going to have a real cash crunch with the onset of spring,”

“Unfortunately, their incomes are down and down with the drought last year and now putting in a crop next spring will cost a lot more.”

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Producers may be turning to other crops, Lewis said, adding that there are other options in Saskatchewan.

Canola is a crop that typically uses a lot of nitrogen. You might get away with using a little a bit more in a crop like spring wheat or durum wheat,” explained Lewis.

“There are also some nutrients left in the ground in areas that didn’t get a lot of rain last year and of course last year’s crop has been supplied with a full package of nutrients and in some cases there are some of these nutrients left in the ground for next year.”

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Graham’s advice to farmers is to stay in close contact with the agricultural retailer who supplies them with fertilizers, pesticide seeds or other crop inputs.

“They will be the best source of information on where the market is headed,” Graham said.

Graham suggests that farmers talk to their agricultural retailer about the type of crops they are growing and the fertilizers they need to figure out the best way to work on the supply.

“We certainly understand the frustration of farmers dealing with current market conditions,” Graham said.

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“I believe our industry is doing everything they can to make sure that farmers can access produce this spring in time for spring sowing and that any supply issues are corrected as soon as possible.”

© 2022 Global News, a division of Corus Entertainment Inc.

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