RIDGETOWN — By mid-June, wholesale fertilizer prices were down about 35% from the near-record highs seen in late March and were trading back in the range of where they were in January. With the market now better adjusted to world circumstances, Growmark Ontario’s fertilizer sales manager Don McLaughlin doesn’t foresee much change — up or down — in the prices farmers will pay this fall compared to last fall, and he advises producers to stick with their usual fertilizer-buying practices moving forward.
“The stupid highs of this past spring have come and gone, the markets rationalized their production, distribution, logistics to where it’s now back to reasonable,” McLaughlin says. He anticipates that fertilizer offered to farmers this fall — ahead of the 2023 growing season — will “trade in the range” of prices seen in the autumn of 2021.
Of course, despite the recent easing, prices are still about double those of three or four years ago, prior to the pandemic, McLaughlin acknowledges. But fertilizer was at “unreasonably stupid, cheap” prices back then, he asserts, adding it corresponded with lower crop prices. “The grain commodities were accordingly cheap, or they weren’t exactly luxurious at the farm gate.”
Whatever a farmer’s usual practice of when and how much fertilizer is purchased, he advises staying with what works and not falling into the trap of panic-buying. There won’t be fertilizer shortages or wild price variations.
“Don’t radically change what you’ve done from tradition, because you’ve refined your practices over an historical period of time,” he says. “Don’t throw away what you’ve learned.”
McLaughlin adds, “Don’t buy out of fear that you won’t get supply. The fertilizer industry is amazingly resilient.”
He blames the previous spike on “fear mongering” about a potential fertilizer shortage after Russia’s invasion of Ukraine. “But it wasn’t true, and it didn’t matter how many times you told people that it wasn’t true. If you can sell it, I can find it. They just didn’t want to believe it.”
The industry has already found alternative supplies to replace those from Russian and Belarus, he says, much of it sourced domestically. Those two countries were “not great suppliers of fertilizer” to Canada to begin with, he adds, though their 10% global market share makes them important.
He expects to see more fertilizer move by rail from western Canada into Ontario and says domestic suppliers are shooting to displace the eastern imports entirely. Growmark itself recently brought in some western Canadian fertilizer. “It’s the first time in years that I was able to source western-originated product, in the second half of the season,” he says. Terrible spring conditions on the prairies meant an oversupply of product in that region. Growmark bought some of this surplus, an example of how the fertilizer market is “constantly adjusting” and finding the required supplies, he says.