Fertilizer price hikes worry P.E.I. farmers, threaten food prices

A photograph of a wheat crop. (CTV News)

Farmers on Prince Edward Island are bracing for fertilizer price hikes, as global supply pressure builds. For grain grower Alan Miller, that could make an already expensive season even harder to manage.

A colder spring has left Miller’s crop slightly behind schedule, but the Elmwood farmer said he has started cultivating his land, and his winter wheat is now at the point where it needs nitrogen fertilizer to support growth.

Miller is also science co-ordinator with the Atlantic Grains Council, which warned in late March that eastern growers are facing a “rapidly deteriorating” fertilizer situation ahead of planting.

“It’s my number one cost,” he said, adding that it will likely rise as the U.S. war with Iran disrupts supply.

Countries around the Persian Gulf are major producers, and the Strait of Hormuz is a key choke point for shipments, with about 30 per cent of global fertilizer trade moving through the waterway. Missile and drone strikes across the region have forced energy facilities to halt output, shutting fertilizer plants there and beyond.

That disruption is being compounded by Canada’s existing tariffs on fertilizer imports from Russia and Belarus.

The Atlantic Grains Council says that means Canadian farmers have “effectively lost access to nearly half of the global nitrogen fertilizer supply” just weeks before planting.

The group argues eastern Canadian farmers don’t have the flexibility to turn to alternative supplies, leaving them with higher costs and fewer options while competing in North American markets. They’re calling on the federal government to remove those tariffs.

“Farmers either are going to struggle to find fertilizer, number one, or number two, be able to afford it,” Miller said.

He added that P.E.I. is somewhat insulated in the short term because fertilizer importers purchased most of this season’s product last year, but he expects hikes to hit as early as this fall.

Higher costs could reach grocery stores

Prices have already increased by roughly 30 per cent in other parts of the country says Fen Hampson, an international affairs professor at Carleton University and co-chair of the Expert Group on Canada-U.S. Relations.

“Ontario and Quebec farmers traditionally buy their fertilizer closer to the planting season, so they’re taking the full hit right now,” he said.

Hampson added the conflict in the Gulf has turned into an energy, fertilizer and food crisis. Even if it ended tomorrow, prices would not drop quickly, because production could take months, if not years, to recover.

In the meantime, Hampson said higher costs for farmers will likely mean higher prices for consumers.

“Grain-based foods like bread, pasta, cereal,” Hampson said, listing products he expects could face price increases. “Meat and dairy, because cattle, hogs, poultry and milk all depend on feed grains grown with nitrogen fertilizers.”

He added canola oil and related products, corn-based oils, potatoes, vegetables and other greenhouse products could also see increases if fertilizer costs stay high.

Back in the field, Miller said fertilizer is only part of the squeeze. It costs around $800 in diesel to fill one of his tractors for roughly a day and a half of field work. Trucking costs are rising, and prices for some crop exports, including soybeans, have been weak.

“It hurts my bottom line,” Miller said. “It will be a struggle to break even.”