An agricultural input supplier says its data shows producers are often in the dark about what they pay for ag chemicals
If you’re a prairie grain grower, you might want to make a few phone calls before you make your next farm chemical purchase.
Shopping around can save you big bucks, according to a recently published industry report by Farmers Business Network.
The FBN report, entitled 2019 Canadian Ag Chemical Transparency Report, suggests that the prices paid by western Canadian grain farmers for commonly used agricultural chemicals varied widely, even in regional markets and between retailers that are located less than 100 kilometres apart.
“Price variation continues to prevail across the industry for commonly used products as well as specialty chemicals,” FBN said in its report, released earlier this month to FBN’s Canadian members.
“We saw great price disparities across a range of ag chemicals … often within the same geographies,” the report said.
“Farmers who live within close proximity to one another can still pay widely varying prices for the exact same product.”
FBN is a membership-based farm chemical and ag input supplier based in the United States. The Canadian arm of its operation — FBN Canada — has more than 1,600 members who grow crops on roughly nine million acres of cropland.
Tom Staples, president of FBN Direct Global based at High River, Alta., said Canadian farmers have always been in the dark about how much they are paying for chemicals compared to other farmers who live down the road or in another Canadian province.
“The entire industry is really built on this lack of transparency to the growers,” Staples said.
FBN’s 2019 price transparency report is the second farm chemical pricing report published by the company since it set up shop in Canada in 2017.
Matt Meisner, a member of FBN’s data analysis team, said the FBN report was based on pricing information submitted by FBN members from across Western Canada.
In total, nearly 2,300 crop input invoices were submitted by FBN members, covering chemical products that were purchased in the 2019 calendar year.
The comparison included both on- and off-patent or generic chemical products marketed by a variety of farm chemical manufacturers and distributors.
The pricing analysis did, in some cases, include prices for chemicals that were sourced through FBN’s Canadian distribution network.
According to the report, quoted prices across Canada’s prairie provinces for Cruiser Vibrance Quattro seed treatment ranged from a high $69.14 per litre to a low of $36.74.
Prices for Roundup Transorb HC ranged from $5.31 per litre up to $8.96 per litre and prices for Nodulator Solid Core Granular Soybean Inoculant ranged from a low of $4.20 per kilogram up to $10.10 per kg.
“In our view, what was most concerning in the report was the sheer scale of the differences in prices that we see for common crop inputs,” said Meisner.
“For example, we saw farms that are maybe 30 or 50 km apart, paying 20, 30 or 40 percent differences in price for literally the exact same product.…
“We know that crop inputs are a huge expense on the farm and a huge driver of farm profitability … so getting a fair price on farm inputs is absolutely critical to the financial security of a farm.”
Even in localized markets, prices can vary significantly, the report suggested.
In one instance, FBN reported the price of Raxil Pro fungicide at $26.43 per litre, compared to $40.92 per litre paid by a grower just 117 km away.
“There is significant variability and it helps the grower to know that,” said Staples.
“In any other industry, you should be able to check prices and know what you’re facing. We think it should be no different for growers buying chemicals.”
The report also suggested that farm size had little or no bearing on the prices paid for commonly used farm chemicals.
Meisner said consolidation in the ag chemical industry has reduced competition, contributing to greater price variability.
The value of the western Canadian farm chemical market is in the neighbourhood of $2 billion per year, Staples said.