Farmers are sounding the alarm on record-high prices for fertilizer ahead of a critical growing season and amid the threat of a global food crisis.
In the months since the invasion of Ukraine – a conflict that has ensnared several of the world’s top fertilizer producers – Canadian farmers have seen the cost of many of their most critical supplies skyrocket. This comes as farmers across North America prepare for their spring planting season and on top of the sharp price increases they were already facing before the war.
“This spring will be the most expensive crop ever put into the ground,” said Greg Sears, a grain, oilseed and pulse farmer near Grande Prairie, Alta. “Bar none.”
The same nitrogen fertilizer Mr. Sears paid $1,200 for in the fall will now cost $2,600 per metric tonne, he said.
Russia is one of the world’s top exporter of nitrogen, potassium and phosphorous fertilizers, but international sanctions imposed since the invasion have crippled that supply. And sanctions against Belarus, a Russian ally in the war and a major producer of potash, have further tightened stocks around the world.
“Farmers, like everyone else, we’re experiencing inflation,” Mr. Sears said. “There’s a perfect storm of supply chain, energy costs, government policy and international politics that have come together to make it a challenging time for everybody.”
A few years ago, Robert Misko, who operates a small-grain farm near the Manitoba-Saskatchewan border, was spending about $200 per acre to get crops into the ground. For this spring season, he estimates it will be about $700 per acre.
“That’s upfront costs,” he said. “Even if you’re financing it, you’ve still got to pay for all your inputs … with no guarantee of what you’re going to get on the other side.”
Crop prices have also increased – wheat prices, for instance, remain at an all-time high – offering hope that those costs will be recouped. Still, Mr. Misko said, there’s no guarantee those prices will hold steady.
There’s also no guarantee that the weather will co-operate. Last year, droughts across the Prairies caused crop production to plummet.
The stress of taking on more and more risk, Mr. Misko said, is taking a toll.
“The smaller [farmers] – they’ve been slowly disappearing as it is,” he said. “These things just make that happen faster.”
Adding to the stress is the fact farmers understand that the importance of this crop extends far beyond their farms, Mr. Misko said.
In recent months, the Food and Agriculture Organization of the United Nations and the World Food Programme, or WFP, have issued increasingly urgent warnings about a global food crisis. Russia’s invasion of Ukraine – both of them major agricultural producers – has cut off access to critical food supplies in large parts of the world.
An estimated 44 million people are on the cusp of famine, according to the WFP. And food prices are at an all-time high around the world.
“Every bushel this year is going to matter,” Mr. Misko said.
Others echo that thought.
“From a Canadian perspective, we’re a net food exporter, and our government has talked really strongly on the world stage about how we want to be part of the solution,” said Greg Northey, the vice-president of corporate affairs for Pulse Canada, which represents pea, lentil, chickpea and soy growers across the country.
“It’s just an incredibly important summer this year – for everyone.”
What makes the situation especially frustrating, farmers say, is that fertilizer companies are reporting record-high profits. “They are definitely, as far as I’m concerned, taking advantage of the situation,” Mr. Misko said.
Saskatoon-based Nutrien Ltd., the world’s biggest fertilizer company, announced a record first-quarter profit last week of US$1.4-billion. And CF Industries, a U.S. fertilizer manufacturer, earned US$883-million in its first quarter, compared with US$151-million in the same period last year.
A spokesperson for Nutrien referred The Globe and Mail to an op-ed written last week by the company’s interim chief executive officer, Ken Seitz, in which he said current prices are the result of supply and demand. Mr. Seitz also pointed to the fact that the company will increase production by one million tonnes for 2022, for a total of 15 million.
“One company can’t make up for the massive supply shortfall caused by these factors,” he wrote. “But as the world’s largest potash producer and one of the top phosphate and nitrogen producers, we’re doing all we can.”
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