Rising input costs amid tight supplies is stressful for Sask. farmers

After a tumultuous year of poor crop yields following weeks of dry conditions, Saskatchewan farmers and farm associations say pandemic-induced inflation and supply shortages are causing their input costs to rise.

“We’re seeing fertilizer prices go up by a multitude of 200 percent or even 300 percent, depending on when it was purchased,” said Kenton Possberg, a farmer north of Humboldt, which is east of Saskatoon.

According to Canada Statistics, the prices of ammonia and chemical fertilizers increased by 0.5% monthly in February, which marked the tenth consecutive monthly increase. Year over year, prices in that product group increased 88 percent.

Possberg, who is also director of the Western Canada Wheat Growers Association, an agriculture advocacy organization, said rising natural gas prices during the fall caused fertilizer prices to rise.

“Some fertilizer plants closed because it was cheaper for them to sell the energy they had … for profit than to make fertilizer. That caused supply disruptions,” Possberg said.

Possberg said that in early 2021, the price of fertilizer was around $400 per tonne, which turned to $700 to $800 per tonne in the summers.

“During the winters, prices were close to $1,100 a tonne.”

Kenton Possberg said sanctions on Russian exports and disrupted supply chains have pushed up fertilizer prices. (Submitted by Kenton Possberg)

Sanctions on Russian exports further increased prices. Typically, Canada imports about 660,000 to 680,000 tons of nitrogenous fertilizer from Russia each year.

“Russia is a major exporter of fertilizers. So the replacement cost, if you need to buy now, could be in the range of $1,300 a tonne,” Possberg said.

Glyphosate, a chemical compound widely used in herbicides that control broadleaf weeds and grasses, remains in short supply.

“A major supplier of glyphosate in February called for a larger force [an unforeseeable circumstance that prevents fulfilling a contract] because they couldn’t get one of the key ingredients to make glyphosate,” Possberg said.

“Farmers would have to cut back. It could change the way some farm this spring. It’s not just the price of inputs, but availability in general.”

High input costs unlikely to subside in 2022

Canadian production of crops such as wheat, canola, barley, chickpeas, lentils and mustard seeds in 2021 was significantly lower than in the previous three years, according to Statistics Canada data.

Now, with inflation and disrupted supply chains, Possberg said the risk to farmers this season is “exponentially higher.”

“Because if you don’t produce as much of a crop, but your costs are twice as high, your risk will also be twice as high.”

Ian Boxall, president of the Saskatchewan Agricultural Producers Association, said that amid tight supplies, grain producers are facing “increases in input prices, two to four times [higher] on some products.

Although raw material prices are high, so are input prices, Boxall said, which are beginning to eat into farmers’ margins.

Ian Boxall said that while commodity prices are high, input prices are beginning to squeeze farmers’ profit margins, a trend that raises concerns for the future. (Submitted by Ian Boxall)

Boxall, who grows wheat, canola, oats and legumes on his farm in the Tisdale area of ​​the north-east of the province, has seen nitrogen fertilizer costs rise.

“Last year, it was around $280 a ton. This year, I paid $775 a ton. That’s just my nitrogen costs. We’ve also seen an increase in phosphate and others,” he said.

“We are seeing shortages in access and availability of parts. If my tractor breaks down, will I be able to get the parts to fix it?”

He said many farmers are worried about this, in addition to the current labor shortage.

“Drought scares me the most. If we continue to see these disruptions to our supply chains, 2023 has me worried. Will I be able to afford fertilizer, especially if there is a drought?”

Boxall advises farmers to lock in supplies for 2023 as soon as they see prices drop.

Possberg is also concerned that the cost of production will continue to rise.

“2022 is going to be a lot riskier than 2021. But the way prices are shaping up, 2023 could be a much more extreme risk year…if commodity prices fall but input prices rise.” hold,” Possberg said.

Brett Halstead, a farmer and president of the Saskatchewan Wheat Development Commission, said crops like canola and wheat are more expensive to grow because they have higher fertilizer needs. (Submitted by Brett Halstead)

Brett Halstead, president of the Saskatchewan Wheat Development Commission, said all farmers feel that anxiety about 2023.

“Wheat prices went up, so revenues went up, but so did spending on fertilizers, fuel, spare parts, agricultural herbicides, transportation, and the carbon tax. We are dealing with shortages and cost increases,” he said.

Halstead said crops like canola and wheat are more expensive to grow because they have higher fertilizer needs.

Seed prices and fuel costs increase risks

But for crops like legumes, Halstead said seed costs are higher.

“Crops like corn and soybeans are also expensive to grow and so are their seeds,” he said.

Rob Stone, a farmer near Davidson, said seed prices are also rising as the cost of the grain itself rises. (Submitted by Rob Stone)

Rob Stone, a farmer near Davidson, has already started thinking about next year’s crops and cost structures.

“Seeds are assigned a higher value just because the cost of the grain itself is higher, plus cleaning. If you buy certified seeds, there are additional levies and fees,” Stone said.

He said his canola yield last season was “one of the worst” he has seen, 60 to 70 percent lower than expected. Now, he is facing “tripling and quadrupling of prices for key crop protection products,” including herbicides like glufosinate, 2,4-D and MCPA.

Jeff Bennett, a farmer from Dodsland in western Saskatchewan, is in the same boat.

“Last year was the worst year ever. Gas prices went up and now they’re up again,” Bennett said.

He said the risk is deeper this year, with supply disruptions a major part of the equation.

“Canola is $21 a bushel, that’s great. If you’re growing 30 to 60 bushels, that would be exceptional. But there’s not enough fertilizer set aside or on the farm to produce a 30 to 40 bushel crop in Saskatchewan.” he said.

Jeff Bennett, a Dodsland farmer, said his fuel bills have doubled from last year and the carbon tax is an added cost. (Fractured photograph)

His fuel bills have also doubled from last year.

“Carbon taxes are just unrealistic,” he said.

“I’m not a polluter, I care about my soil more than most as it affects me every day,” he said, but “people in Ottawa have no idea how the industry works.”

Stress in farmers

Lesley Kelly, a grain farmer from Watrous, southeast Saskatoon, said that while moisture levels are good on her farm, supply issues remain.

“There is a lot of concern and growing stress among farmers with these input prices,” he said.

Kelly was only able to produce about 50 percent of her usual crop last year.

“Seeing that the prices of agricultural inputs are inflated, we are worried about 2023, without knowing the market prices,” he said.

Lesley Kelly is a farmer and co-founder of the Do More Agriculture Foundation, a Saskatchewan organization that advocates for mental health in the agriculture industry. She says that for many farmers, high input costs are a major source of stress. (Photograph by Delia Crittenden)

As co-founder of Do More Agriculture, a Saskatchewan organization that advocates for mental health in the agriculture industry, Kelly has been speaking with farmers across the province and country.

“With the pandemic, rising prices, battling adverse weather, that stress is mounting. We’re fostering conversations for farmers to communicate. I know for many, prices are keeping them up at night,” Kelly said. .

“Farmers are eternally optimistic people. We enter each year with hope. But going into this season with all of this, it’s a cause for concern for many.”

You can call the Farm Stress Line toll-free at 1-800-667-4442.

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