Prices for farm inputs can vary greatly, depending on which side of the border a farmer is on, according to a survey conducted by University of Guelph professor Ken McEwan.
The Ontario Farm Input Monitoring Project has checked prices at farm supply stores three times this year, collecting data on 44 farm inputs from 10 locations in Ontario, four in Michigan, and one each in Ohio and Indiana. Thirty retail outlets were surveyed in Ontario and 21 in the United States.
The survey used an exchange rate of 94 cents US.
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Of the 44 products, seven were cheaper than they were in 2006. Apart from products that are typically more expensive in Ontario, such as gasoline ( 15.4 percent more expensive than in the United States), diesel (14.4 percent) and propane (18.8 percent), the researchers also found that anhydrous ammonia was 8.7 percent more costly.
Prices for pesticides such as Atrazine, Banvel, Treflan and Malathion were significantly higher in Canada, with Atrazine being as much as 135.7 percent more expensive.
Select, manufactured by Arysta LifeScience and used for broad spectrum grass control in broadleaf crops, was found to average $159 per litre in Ontario, compared to $49 in the U.S. On the other hand, ammonium nitrate was 4.4 percent cheaper in Ontario.
“Originally, when this was set up a decade ago, it was because there was feelings in Ontario and across Canada that farm inputs were higher here than in the United States,” said McEwan, who works in the production economics and agribusiness department at the university’s Ridgetown campus.
“But it actually showed that prices for fertilizers and pesticides were pretty similar. We were doing extremely well; we were better served.”
Over the past decade, McEwan has seen the Canadian dollar drop to 62 cents and then rise to its current level of 95 cents.
“But in the last couple years, as the exchange rate has risen, it’s beginning to highlight the concern again,” he said.
“Canadian products again seem to be higher in general than their U.S. counterparts.”
For years, Roundup prices were up to 50 percent lower in Canada than in the U.S.
“Now that the product has come off patent, and Monsanto has brought out many different varieties and generics, all of a sudden it has flipped the other way.”
The most recent survey found that Roundup Weathermax is nine to 10 percent cheaper in the U.S.
Monsanto Canada spokesperson Trish Jordan said product pricing typically varies according to region and market size.
“We price according to region. If you look at any world area, the price of a product is not the same everywhere. It’s different according to the economics, the market size, the cost of production and the cost of transportation.”
Croplife Canada executive director Peter MacLeod said manufacturers and retailers set their pricing as they see fit.
Higher regulatory costs in Canada for product registration, warehousing standards, empty product container returns and obsolete product disposal tend to drive pesticide prices higher north of the border, he added.
He said the study’s authors didn’t factor in company rebate programs, which could significantly reduce prices that farmers pay for inputs. Also, because most pesticides are made from petroleum, higher oil prices may be playing a role.
“Oil would definitely come into play,” he said.
“Also, how far they have to come from because some of these products are made in the U.S., Asia and Europe.”
The stronger loonie should make imported products cheaper, but the final decision on whether to pass the savings on to the consumer would be up to the individual manufacturer, said MacLeod.
McEwan said the reasons why prices vary might include patent expiry dates and differences in market size and distribution areas. The biggest reason for price disparity in recent years is the exchange rate, he added.
Some input prices are highly variable because of fluctuating energy prices, but pesticide prices tend to be more stable, with companies keeping price hikes in line with inflation.
“You can develop very defensible explanations as to why these price differences exist,” he said.
“But given the millions of acres of wheat grown in Western Canada, I would question the need – all things being equal – for a difference in pesticide pricing.”
