Wet weather has long economic reach

Unusually wet weather that has waterlogged millions of acres of farmland and taken a bite out of farmers’ pocketbooks this spring is also sending shockwaves through the agricultural retail sector.Chemical, seed and fertilizer retailers are summing up their losses and preparing to take delivery of millions of dollars worth of unused crop inputs.An estimated 7.9 million acres went unseeded. In Saskatchewan, meaning fertilizer, seed and chemicals that would normally have been applied are instead being placed in storage or returned to retailers for credit or refunds.Canadian Association of Agri-Retailers (CAAR) president David McKay said the exact cost of this year’s unusually wet weather may never be known, but the economic impact will be widespread.“We don’t have the ability to track sales data … but there’s no question, especially in Manitoba and Saskatchewan, that many ag retailers are going to be taking a severe hit this season,” MacKay said.“There are some areas where the weather has been perfect … but there’s no question that a very large geography has been extraordinarily hit by Mother Nature this year.”CAAR represents 1,000 crop input retailers.Members include large multiple-outlet line companies such as Viterra, Cargill, Pioneer, Parish & Heimbecker and Paterson Grain, as well as fertilizer suppliers such as Mosaic, Agrium and PotashCorp.However, the large majority of members are small, independent retailers in rural communities.Mackay said many CAAR members were still recovering from the recession and market crash that hammered the North American economy two years ago.For some ag retailers, especially those in Saskatchewan and Manitoba, a disastrous 2010 planting season will add extra financial stress.At Foam Lake, Sask., the economic impact of this year’s rainfall will be far-reaching, said Todd Kosmonek, owner of Clearview Agro.He said some farms in the Foam Lake area received approximately 400 millimetres of rain this spring.Seeded acreage in the area was 25 percent of normal, meaning input sales were also 25 percent of what would normally be expected.Many of the acres that were planted are now under water or cannot be accessed, meaning chemical sales are down significantly.Kosmonek said returns of unused crop inputs have been rolling in steadily.“We shipped out quite a few bags of seed this spring but there’s a hell of pile in here now that has come back,” he said.“It’s the same for fertilizer. Where we would normally sell about 3,500 tonnes of anhydrous, we’ve sold about 900 tonne this year and where we thought we were going to be selling a bunch of different chemicals, now it’s nothing but glyphosate because farmers will be doing summerfallow all year. It’ll be tough all over.”He said more than the agricultural sector is affected.“When farmers don’t have money to spend, nobody else in a small community like this does either. If farmers get no crop, there’s no money circulating so it’s going to be tough on everybody.”Jim Bletsky, a farmer and independent seed retailer from Canora, Sask., offered a similar view.Fifty to 60 percent of the crop was seeded in his area, and about a quarter of what was planted is severely stressed or drowned.He said canola seeding in his area was down significantly.“Canola seems to be the crop that missed the boat in our area and that’s based on the returns that we’ve had back to our agency,” he said.“Probably in the neighbourhood of 50 to 60 percent of the canola that we sold this spring has been returned.”Bletsky said producers in east-central Saskatchewan are doing their best to stay on top of weeds, but with fields so wet, most are leaving ruts and many acres remain inaccessible.Bletsky said line companies in his area are moving a fraction of the chemical that they normally would.“You drive down the highway and every second truck seems to be a half ton hauling some sort of product back to the elevators,” he said.“I think it’s going to be a pretty general hit this year, not only for ourselves but for some of the larger … companies as well.”