Canadian fertilizer prices are expected to increase as spring draws nearer, according to industry professionals.
“The further you buy out from spring, the prices tend to be a little bit lower. In making your commitments early, prices tend to edge up as you get closer to spring,” said Don Kitson of International Raw Materials Inc. in Fort Saskatchewan, Alta.
Why it matters: If farmers are aware of price forecasts they may be able to reduce input costs by buying at less-expensive times.
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Kitson said no one knows for sure what fertilizer prices will be down the road given that they are priced off commodity markets, but prices will climb as winter recedes. He advised farmers to find a retailer they can rely on to tell them when it’s the right time to buy.
Over the last year, fertilizer prices have jumped by 20 to 25 per cent said Clare Kinlin, sales manager with MacEwen Agricentre Inc. in Maxville, Ont.
China is behind the change
“They used to export so much nitrogen on the world market and now they are an importer of nitrogen,” Kinlin said.
He also cited the soft Canadian dollar and consolidation in the fertilizer industry as other influences on future prices.
Kinlin said some fertilizer, especially solids, have gone up by as much as $100 per tonne, while liquids have seen price increases of up to $50 per tonne.
According to Kitson, China cut its urea production to reduce the environmental impact.
“That really affected the world supply balance,” he said. “A lot of it is tied to coal and (the Chinese) trying to improve their environment.”
Kitson noted China produces enough fertilizer to cover most of its own needs and for export, while importing from other countries.
“They are a major importer of potash fertilizers, so that’s always a big interest to Canadian companies. Canada is one of the largest exporters of potash in the world,” he said.
Regional issues can also affect future prices.
Kitson said if something happens along the United States Gulf of Mexico coast with fertilizers, it impacts prices in Western Canada, but it can take a month or more for the effects to show up.
“When you need that load of fertilizer, you need it. If you are planning to get it, you are more interested in what’s going on in the big picture,” he said.
