Fertilizer merger shows few impacts so far

Farmers say they will learn this spring when they go to pick up fertilizer if the changes helped to improve wait times

WINNIPEG — A year following the massive merger of fertilizer giants Agrium and Potash Corp. of Saskatchewan, the sector appears to be moving ahead with few differences.

When the new company Nutrien was formed in early 2018 to become the world’s largest fertilizer company, people in Western Canada were cautious and didn’t know what to expect with a larger player and fewer competitors in the marketplace.

Now a year later, retailers and producers say the merger hasn’t really shaken things up, although some people are still 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 Redfern, 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 from Agrico. Since the merger, purchases have continued as before. Redfern estimated, however, that more is now being bought directly through Nutrien.

For producers, it remains a wait-and-see game because many of the new company’s changes are ongoing, according to Todd Lewis, president of the Agricultural Producers Association of Saskatchewan.

“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 as Nutrien Ag Solutions and invested money in retailer upgrades. Lewis expects producers will learn this spring when they go to pick up fertilizer if the changes helped to improve wait times.

Lewis also said some people have expressed concerns about whether Nutrien will follow through with promises it made before the merger.

“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 promised it would locate its head office at Saskatoon, where the head office of Potash Corp. was located. Potash Corp. was originally a Saskatchewan crown corporation. When it was sold decades ago, legislation was passed requiring Potash Corp. and all of its successors to maintain a head office in Saskatchewan.

However, since the merger, almost all of the company’s executives have been based out of Calgary.

Nutrien also brought in an unexpected change when it closed its phosphate production facility at Redwater, Alta.

The 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 all phosphate production south of the border, 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 U.S. only phosphate production 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 other retailers have started to expand their 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 pay more for phosphate because of the closure.

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