War in Iran drives up diesel and fertilizer costs for eastern Ontario farmers

The price of diesel continues to soar and fertilizer could soon follow, which could lead to even higher food prices. CTV’s Kimberley Fowler reports.

As tension rise in the Middle East, the overall cost of living continues to hit closer to home.

The war in Iran is driving up gas prices and threatening fertilizer supplies, just as Canadian farmers are gearing up for planting season.

The price of diesel is going up, soaring to roughly $2.37/l in Ottawa on Wednesday. Mel Foster, owner of the Foster Family Farm in North Gower, is feeling that pinch.

“When you actually look at the number of trucks bringing our food, bringing our products to us, it’s tens of thousands of trucks, moving all around North America and diesel is still king, and it will be for a long time,” Foster says.

Some of the first places impacted by rising costs due to war, are farms. Everything from the tractors to the irrigation systems, run on gas.

“We have transplanters. We need tractors to put them in and if you don’t do that, well it just means so much more work doing it by hand, and then the cost of labour is also going up,” Foster explains.

As Iran limits shipments through the Strait of Hormuz, the world is watching prices rise for two key commodities — gasoline and fertilizer. The narrow passage handles about a fifth of the world’s oil shipments, and nearly a third of global fertilizer trade.

As the war drags on, the bigger concern for Canadian farmers could be a shortage of fertilizer, which is vital for farmers’ yields.

“There may be a little less (fertilizer) this year because the price is so much, and then hopefully (the war) is over soon. The prices could come back to a normal price range…so there is some fluctuation, but you can’t mine (the soil) year after year forever.”

Foster has locked-in a set price with his supplier for fertilizer this year, but that could drastically change next year. Fertilizers are essential for farmers because they gives crops the nutrients they need to grow, but as fertilizer and diesel prices go up, it can put farmers in a tough position.

“We will see farmers will feel the pressure immediately,” says Mike von Massow, a professor at the Ontario Agricultural College. “We will see if they get to pass some of those costs on to us as consumers, or they have to absorb those costs and they will be significant.”

Economists also warn the impact of high gas and fertilizer prices for farmers across the globe, could last well beyond any resolution of the war in Iran.

For farmers like Foster, there’s no discount when it comes to growing food.

“All those costs add to our costs, which we have to pass on to the end user, the consumer.”

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