The sliding loonie: will input costs rise?

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Published: September 10, 1998

Prices for farm inputs haven’t jumped noticeably since the Canadian dollar started plunging this spring.

But here’s what some people in the industry expect may happen as time unfolds.

Fuel

Canadian fuel prices may have risen relative to American prices, said Lorne Henry. But meanwhile, crude oil prices keep dropping, balancing the impact, said Henry, who tracks input prices for Keystone Agricultural Producers.

Fertilizer

Much of the phosphates farmers use come from Florida. In the short term, prices should stay stable, said Bernie Tiessen, a dealer at H &A Double Diamond in Boissevain, Man.

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If the dollar stays low through the winter, phosphate prices may rise, said Tiessen, who is president of the Canadian Association of Agri-Retailers.

Nitrogen prices, particularly ammonia, will be down this fall from where they were in spring.

“This fall looks like good value for farmers to be getting in on fertilizer,” said Tiessen.

He expects U.S. farmers will look seriously at shopping in Canada for fertilizer this year.

Chemicals

The Canadian market for pesticides, herbicides and fungicides is self-contained because of the registration system, explained Maurice Korol of Agriculture Canada.

Often, the same chemical is cheaper in Canada. For example, Roundup was 40.1 percent cheaper in Manitoba than in states just across the border in June 1997, and 43.9 percent cheaper in June 1998.

Tiessen doesn’t think the dropping dollar will have a significant effect on chemical prices.

“They price them kind of on what the market will bear,” he explained, adding some chemical prices came down this year because of the downturn in the farm economy.

About the author

Roberta Rampton

Western Producer

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