Farmer Blair Cummins says fertilizer is by far his biggest annual expense — and those costs have increased dramatically.
“We just bought some urea last week for $1,300 a ton, compared to about $450 a ton a year ago,” he said.
This rise in fertilizer prices has contributed to record earnings by Saskatoon-based Nutrien, which posted $1.4 billion in first-quarter earnings.
“Global agriculture and crop input markets are being impacted by a number of unprecedented supply disruptions that have contributed to higher commodity prices and escalated concerns for global food security,” Nutrien President and CEO Ken Seitz said in a news release.
Cummins believes the price increase on fertilizer is more about making money.
“I think the fertilizer companies, they look at what we’re getting, what we can sell new crop grain for, canola and wheat, and they’re thinking ‘These guys are going to pay more for fertilizer, let’s charge them a little more,'” he said.
“I think it’s just a simple case of they’re charging what they think the market will bear.”
Cummins says farmers are getting more for wheat in part because of the conflict in Ukraine.
“The Baltic Seas, a lot of wheat comes out into the rural market out of that and it’s not coming out of there right now,” he said, adding that there were also wheat shortages around the world from last year’s growing season.
“I’ve never sold wheat for this much money.”
But, he says, that could all change in a hurry.
“It doesn’t take much for the world markets to turn around,” he said.
“A couple of good crops in a row and then you get back into a surplus situation, and the price will be back down to $10-$12 a bushel for canola.”