MEDICINE HAT – Tighter supplies and higher prices characterize the 2011 spring fertilizer situation.
Ray Dowbenko of Agrium in Calgary said producers can expect a rise in fertilizer prices in the coming year and should manage their land for 2011 on that basis.
He said the supply and demand issues that are providing prairie farmers with more sustainable incomes from their grain sales are the same ones that will cause increased demands for fertilizer and an accompanying rise in nutrient prices.
“As farmers, you have received price signals to produce more, and to do that you will invest in more fertilizer to increase your opportunities to grow larger crops,” said Dowbenko, suggesting that 40 to 60 percent of crop yields are generated by having a supply of nutrients at the ready in the soil.
Read Also
Agriculture ministers agree to AgriStability changes
federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
“That shrinks supply and raises prices,” he said.
Relative to last year, this fall producers in the United States put seven percent more phosphorus in the ground and 30 percent more potash.
Due in part to high fertilizer prices in 2008 and 2009, growers reduced applications, choosing to draw down their soil nutrient supplies instead of buying replacements.
He said that is combined with supply- choking issues related to reductions in fertilizer production from regions such as Florida and tariffs being applied on fertilizer exports from China.
Fertilizer producer Mosaic operates a large phosphate mining operation in central Florida and was denied an 11,000 acre expansion by a Jacksonville court that would have sustained its production at that site.
As a result, the large Mosaic mine is closing its operations, adding stress to the supply side of international fertilizers.
Indian and Brazilian farmers have heard the price messages as well and fertilizer manufacturing nations are shipping more to them than in the past two years.
Despite fertilizer being produced in Canada from Canadian mining and energy resources, prices are set globally and based on product being at port in the Gulf of Mexico.
“You are competing with farmers around the world for your own supplies,” Dowbenko told 275 farmers attending the Southern Alberta Conservation Association’s annual conference in Medicine Hat last week.
“There are negatives coming on the supply side and we need to plan for them,” he said.
