With inflation, getting out of the game requires a lot of acrobatics from farmers

In Montérégie, the sowing season is in full swing. Under a blazing sun, gigantic tractors raise clouds of dust in the middle of fields that stretch as far as the eye can see in the plain.

Jérémie Letellier, a grain producer in Napierville, stops his seed drill to take stock of inflation. Its machinery is diesel-hungry and the price has doubled in the past year to reach $2. In seed time it’s a $1500 to $2000 bill every three dayshe says.

For the moment, he spends without thinking, he has no choice, but he knows that at the time of the balance sheet, the fuel bill will weigh heavier than expected in the balance.

However, the price of hydrocarbons remains a secondary problem. This year, the biggest issue is fertilizers and fertilizershe laments, speaking of his biggest expense item.

Last year, a ton of fertilizer cost him $500, on average. This year it is $1,000. And again, he considers himself happy. For producers who paid for their order after March 2, rates can go up to $1,500 per tonne.

It was that month that the federal government imposed a 35% tariff on fertilizers from Russia and Belarus. One of the many penalties decided by Ottawa following the invasion of Ukraine, but which now handicaps many growers across the country.

Jérémie Letellier hopes that the government will reconsider its decision, because it is almost impossible to do without Russian fertilizers. The tariffs will be transmitted to the producers, it is not the Russians who will pay themhe lets go a bit disillusioned.

The price of grain at its highest

On the other hand, Jérémie Letellier also has something to celebrate: the value of his production has skyrocketed. The price of wheat, for example, has doubled over the past two years. If prices hold, there will be no problempredicts the grower of wheat, corn and soybeans.

” We can’t complain, it makes up for it. Will it last? We never know. If it goes down, will the price of inputs go down? That, I highly doubt. We are in an inflationary spiral that will be difficult to break. »

But not everyone is doing well. Mr. Letellier, who is also president of the Fédération de l’UPAUnion of agricultural producers of the Montérégie, is worried about pig farmers.

Because of the price of grain, the price of feed has also skyrocketed. They must also deal with the setbacks of the main processor, Olymel, which buys fewer small livestock.

These producers are going through a situation that is quite difficult, quite stressfulaccording to him, because the inputs are very expensive and the pigs do not leave the farms.

While the context is similar for beef producers, dairy and poultry producers are doing quite well, as supply-managed sectors benefit from periodic price adjustment.

The grocery bill will keep going up

There is a lot of uncertainty in the marketsanalyzes the principal economist of the Institut du Québec, Luc Belzile.

It details an arm’s length list of items to consider. First there is the rise in the price of fertilizers, feed, seeds, agricultural equipment (purchase and maintenance). Then that of the price of transport which affects the entire chain of production and distribution.

Then there is the war in Ukraine which disrupts both maritime transport and grain production. A third of the world’s wheat production comes from Ukraine and Russia.

And finally, there are the usual climatic factors which, with global warming, are becoming ever more unpredictable. Mr. Belzile is monitoring the situation in California in particular, the garden of the united stateswhere many fear a severe drought again this year.

All these factors produce a lot of uncertainty and put pressure on agricultural commodity prices., concludes the specialist in agricultural issues. And, according to him, the grocery bill has a good chance of increasing in the coming months.

” The increase in fuel prices has repercussions on the price of fertilizers, then on grain prices and then on milk and meat prices. It’s a ripple effect. The consumer wonders why the increase in the price of fuel has an influence on the price of milk. It is the price sequence that is felt at all stages. »

According to Statistics Canada, food prices jumped 8.7% in Quebec between March 2021 and March 2022.

Before returning to his sowing, Jérémie Letellier assures us that he is keeping his spirits up and that he remains focused on his harvests.

There are a lot of uncertainties at the economic and environmental level, but we have to adapthe said philosophically, with the prices we have, if the harvests are good, the year will be good.