Nutrien merger effects ongoing one year later

WINNIPEG – After clearing various regulation hurdles, Agrium and the Potash Corporation of Saskatchewan merged together at the start of 2018 to become the world’s largest fertilizer company, Nutrien. At the time Nutrien had made various promises and many in Western Canada were cautious, hoping for the best but not fully knowing what to expect.

Now a year later, Nutrien has begun to settle into its new role in the agriculture world and according to retailers and producers it hasn’t really shaken things up all that much. However, there are a few things that still have many in Western Canada cautiously watching.

“I don’t want to pretend to call it a non-event because there’s always a concern about consolidation and all I can say at the moment is it doesn’t have any obvious impact,” said Ray Redfurn, president and founder of Redfern Farm Services in southwestern Manitoba.

Before the merger independent crop input retailer Redfern Farm Services sold both Agrium and Potash Corp. products. Most Agrium products were bought directly from the company, while Potash Corp. products were bought through a middleman, Agrico. Since the merger purchases have continued same as before. Redfern estimates though that an increasing portion of their purchases are now being bought directly through Nutrien.

On the producer side of things it’s still a wait and see game when it comes to the merger as many of the new company’s changes are still ongoing, according to Todd Lewis, president of the Saskatchewan Agriculture Producers Association (APAS).

“There were some concerns I know in some areas with the amalgamations that there was going to be lost capacity, as far as delivery opportunities and picking up fertilizer,” Lewis said.

In July, Nutrien rebranded Agrium’s Crop Production Services retailers to Nutrien Ag Solutions and invested money in upgrades to the retailers. Lewis expects producers will find out this spring when they go to pick up fertilizer if the changes helped to improve wait times for pickups.

There is concern from producers though if Nutrien will follow through with all of the promises it made before the merger, according to Lewis.

“A lot (of the news) about (Nutrien) in the media is about the head office here in Saskatchewan. I think Saskatchewan producers see that and kind of wonder about some of the promises that were made, if that wasn’t being kept, are some of the other ones at risk as well,” he said.

Before the merger Nutrien had promised Sasktchewan it would make Saskatoon its head office location, as Saskatoon had been the head office of Potash Corp. Potash Corp. was originally a Saskatchewan crown corporation and when it was sold off to become separate company decades ago, there was a piece of legislation made which required Potash Corp. and all of its successors to maintain a head office in Saskatchewan. Since the merger though, almost all of the company’s executives have been based out of the Calgary office.

One change made in the last year by Nutrien that wasn’t expected before the merger was the company’s decision to shut down phosphate production at its facility in Redwater, Alta.

The Redwater plant was owned by Agrium before the merger and was the only phosphate manufacturer in Canada, while Potash Corp. had phosphate facilities in the United States. For cost savings Nutrien decided to move all of its phosphate production to the U.S.

By moving phosphate production to the U.S. solely, Redfern said independent retailers have been warned by Nutrien they will have to ship the product in themselves. However, for retailers in Manitoba, like Redfern Farm Services, Nutrien has said it will still distribute phosphate product at its facility near Portage la Prairie, Man.

The shift to all U.S. phosphate products has provided an incentive for more competition in the market. Before the merger Agrium had the advantage of being the only retailer of Canadian phosphate products. However, now that all phosphate products will be coming from outside of Canada other retailers have started to expand their physical presence in Canada.

“(We’re hoping) that added competition here will bring fertilizer prices down, (or) at least keep (them) throttled a little bit anyway because we need good competition to make sure we’re paying a fair price,” Lewis said, adding Nutrien has assured farmers they won’t end up paying more for phosphate because of the closure.

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