Most farmers insulated from fertilizer price shock: KAP

A large number of farmers are protected from the rising cost of fertilizer this spring because they pre-purchased before the war in Iran broke out, according to Manitoba’s general farm policy organization.

It has become clearer that many Manitoba farmers are insulated for the year, as several weeks have passed since the fertilizer market was impacted by the conflict in the Middle East, Keystone Agricultural Producers president Jill Verwey told the Sun on Friday.

“As a broad statement, I think it’s been confirmed that for the most part, a large portion of their fertilizer purchase was done before the conflict occurred,” Verwey said.

She added that some farmers will need to accept high prices during the season as their crops require more product, and a smaller percentage of farmers caught off guard are feeling the full impact of the inflated market.

According to World Bank Group, fertilizer prices jumped 26.2 per cent in March, and the group projects prices will rise further this year. The price increase comes after disruptions to transportation in the Strait of Hormuz, which Iran blocked in response to being attacked by Israel and the United States on Feb. 28.

Dean Toews, a farmer in MacGregor, said a significant amount of risk was added to his operation this year because he had to pay a higher price on some of his fertilizer stock.

“We had bought some, but should have bought all of it, obviously,” Toews said. “The last stuff we bought, if we bought all of it at that (price), then that would be rough.”

Toews’s farm includes 3,000 acres of corn, a crop that requires a high amount of nitrogen. He said that with the cost increase, he has to have an average to above-average crop to break even on the year. Other scenarios that are outside of his control, and at the hands of Mother Nature, become business losses to him.

“How it affects our farm is just that our risk level is … way higher than it’s ever been,” he said. “So it’s a very fine line for us, and a lot of guys, on whether you’re going to make money.

“You just have more to lose, I guess, when you put more into fertilizer.”

A farming strategy he adopted for his farm in 2013, which uses less fertilizer but places it in a more efficient location for his corn, saved about 30 pounds of fertilizer per acre, he said. Given the rise in the cost of fertilizer, the tactic translates to about $72,000 in savings, he said.

In an email to the Sun on Friday, Fertilizer Canada reiterated its call for farmers to check in on local fertilizer supplies as the conflict in the Middle East continues to pose a risk to the supply chain.

“As a globally traded commodity, any impact to global fertilizer production can be felt throughout the market,” said Michael Bourque, president of Fertilizer Canada. “This remains a fluid situation, and we are staying closely engaged with our members as conditions evolve.”

A spokesperson for Koch Fertilizer, Brandon’s local fertilizer producer, told the Sun that the plant is pushing to produce what’s needed.

“We are working hard to produce as much product as possible to meet spring demand,” the spokesperson said. “Our goal is to deliver high-quality nitrogen fertilizer products when our customers need them.”

The big questions on many farmers’ minds today is where the price will be when the season is wrapping up and it comes time to stock up for next year, Verwey said.

“A larger concern is if this continues,” she said. “Where is the price going to be in the fall when producers are starting to pre-buy for 2027?”

World Bank Group said in late April that fertilizer prices are projected to increase 31 per cent in 2026, falling to the lowest fertilizer affordability level since 2022.

» cmcdowell@brandonsun.com