Farmers are facing increased input costs when sowing crops this spring. This is an obstacle affecting how farmers approach their businesses and could mean higher food prices in the future.
Professor Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University, says fertilizer costs have risen significantly.
“These important inputs for farmers are on average about US $ 1,500 per ton, five times more than they were 12 months ago. Farmers need fertilizer to produce their crops, The market is dominated by a small number of highly diverse multinational companies that supply and manage products to artificially raise fertilizer prices, some of which are in Canada, “Charlebois said in an email. rice field.
He said supply chain challenges pushed up fertilizer prices, while Russia’s invasion of Ukraine not only raised prices, but also made it difficult for Canadian farmers to obtain fertilizer.
“Many farmers pay tariffs on fertilizers, sometimes 35 percent. [such as imports from Russia].. Recently, additional charges have been added. In fact, some farmers even buy without knowing what the price will be if they decide to commit. “
A 35% tariff was applied to Russian fertilizer imports.
Many grassland farmers survived the drought last year, but even those who did not face higher costs of fuel for seeds, fertilizers, chemical sprays, and agricultural machinery. Farmers save money with sprays and fertilizers, or maintain standard input levels at costs that can be rewarded if commodity prices are high enough, despite potential reduced yields. You need to choose whether to do it.
Kent Lowen, a farmer near Brandon, Manitoba, said timely purchases helped avoid rising costs.
“I had already booked the chemicals in February, when there was a low supply chatter,” Lowen said.
“I’m staying at the same fertilizer level to grow barley and rapeseed. Perhaps I’ll get the amount of compensation I need.”
Near Lucky Lake, Saskatchewan, Bensetler noticed high prices for herbicides glyphosate and fertilizer nitrogen.
“Glyphosate has doubled in price when available. Nitrogen is much more than doubled. But both wheat and flax have doubled, and something like mustard was 6 a year ago. It’s been up to 7 times. It’s a wild time to be a farmer, “Settler said.
“We are applying less fertilizer because of the drought. If it rains in June, we will try to put more effort into monetization at a higher price. Cost and availability. Due to lack of sex, we are reducing the amount of glyphosate used. “
Michael Harden states that he will reduce the use of fertilizer on farms near Rockglen, Saskatchewan.
“The shortage and the minimum amount of fertilizer add enormous costs to the input. No matter what happens, the yield will be low,” Harden said.
“I bought it last fall. We got most of what we wanted, but we weren’t crazy about it because of the cost. If it’s not too expensive, we’ll use more.”
Todd Lewis, the second vice president of the Canadian Agricultural Federation (CFA), said difficult challenges for producers are seeking solutions. His organization is “extremely concerned” about rising fertilizer costs and the availability of fertilizers and other important inputs needed to support Canada’s food production in the coming years. I did.
In a statement emailed to Epoch, Lewis said, “Despite the high commodity prices, soaring food production and supply chain disruptions caused by the Ukrainian conflict put a lot of pressure on margins and farmers. Has brought about significant uncertainty and variability that is difficult to manage. ” Times.
“The CFA will work closely with the government to raise these concerns and work with farmers to find solutions to current accessibility concerns for these products, as well as to mitigate future challenges. Emphasizes the importance of addressing long-term concerns. “
Fuel costs to fuel inflation
At all indexes Oil price Since December 1, 2021, rising fuel prices are both direct and indirect reasons for increased spending on farms and are the costs that are passed on to consumers.
“Fuel costs are affecting the economy as a whole, including food, and we expect food inflation to continue to rise for the rest of the year,” said Charles bois.
Barry Prentice, a professor of supply chain management at the University of Winnipeg, agrees that rising fuel prices will drive inflation.
“Part of the reason the recession eased was that oil prices fell to zero. When oil prices rise, it’s like taxing everything to slow the economy, but we do. What I have now is the strange situation of rising prices. [while] Everyone wants to get more for what they sell and do, including wages, “Plenty explained.
“Interest rates are skyrocketing with inflation and I think there is a real risk of what is called stagflation. [in the 1970s] Growth has stopped and inflation has occurred. Therefore, the pandemic was like an uncontrolled experiment. What if I turn off the economy and try to turn it on again? “