By GEOFF DALE
Earlier this month Potash Corporation of Saskatchewan Inc – the world’s largest fertilizer enterprise – announced the offshore marketing company for the province’s potash producers Canpotex Limited, and Sinofert Holdings Limited, a fertilizer company in China, had agreed on 2008 potash pricing at a staggering $400 (US) per tonne higher than last year.
According to the International Center for Soil Fertility and Agricultural Development (IFDC) world fertilizer prices surged by more than 200 per cent in 2007– a rise fueled by such factors as a greater demand for grain for biofuel production, higher energy and freight prices.
David Start, a corn producer south of Woodstock, is trying to keep his costs down by sending tests done on his soil to the lab to get recommendations on how much fertilizer to apply. “With this increase and our fuel bills tripled over the last three years, we are being as frugal as possible,” he says. Although it’s recommended to do such analysis every three years, he’s preparing for it to be an annual occurrence from now on.
Larry Shapton, general manager of the Ontario Wheat Producers Marketing Board, said while the scenario varies from producer to producer, there is no question input costs will be affected. Nevertheless, he doubts growers will cut back on nitrogen applications. “I think producers will do everything in their power to maximize their yields.”
For Jim Michael, general manager of Sylvite Agri-Services, agricultural and agribusiness sectors are in “unchartered waters – an unknown territory brought about by a huge world demand that supply hasn’t been able to match.” He pointed out that fertilizer costs can increase over a winter by five to 10 per cent maximum but Mono ammonium phosphate (MAP) has gone up by 100 per cent in the last year. “This is huge.”
What’s even more concerning is that his company had bought fertilizer last year to prepare for the current growing season. “If they think the costs are high now, wait till next year,” he said. “It will be crazy.”
If there is a slight sliver of sunshine to be found in the darkening agricultural skies, OMAFRA’s Keith Reid has discovered it. While the Stratford-based soil specialist admits the rapid rise in fertilizer costs “may be a shock to the system” he said the increase has happened at a time when grain and commodity prices are also rising.
“If you look at the fertilizer price not as the price per ton but as the pounds of grain it takes to pay for the manufacture of fertilizer, we’re not really that far away from a traditional relationship between the price of corn, nitrogen and potash,” he said.
It’s also made livestock manure more valuable, he said, noting farmers are paying more attention to managing their manure to maximize their nutrients. “As a result, there is a lot less manure left over, going to places on fields where it shouldn’t be.
Farmers motivated to maximize the efficiency of fertilizers is another effect, he added, noting by way of example that for phosphorous applications, where growers are using more banding than broadcasting.
Start agrees that the fertilizer crunch is making manure “an even more valuable resource.” It could also create more demand for municipal sewage, he said. BF
