Increasing costs and government disconnect on fertilizer
EASTERN ONTARIO — What are some of the key concerns of farmers and crop producers with another growing season just around the corner?
Vankleek Hill-area cash-cropper and elevator operator Kevin Wilson identified three main issues he’s hearing at the counter these days: fertilizer and other crop input costs, the rising cost of borrowing money, and “government disconnect from practicality and reality.”
On that last point, he explained that Ottawa simply doesn’t grasp the impact of its carbon tax or its plan to reduce fertilizer emissions by 30 % by 2030. “There’s a great disconnect from reality and efficiency and practicality, and our government takes for granted that Canadian farmers will always continue to produce,” said Wilson, who got an up-close look at the competitive pressures when he travelled in February with an Ontario trade delegation to Japan, Vietnam and Malaysia.
“We compete against US soybeans overseas for market share,” he pointed out, highlighting the example of Vietnam, a market of 98 million people in an area smaller than Ontario. American farmers are selling there, unhindered by a carbon tax or the threat of fertilizer cuts. “If you raise our cost of production (in Canada), how are we supposed to compete to gain that market share? How are we supposed to do that?” Wilson asked.
“You have to be cost competitive,” he emphasized. “You can sell quality, you can sell a lot of things, but at the end of the day, it’s a price-sensitive market, and you have to be price competitive.”
Ironically, Canada may end up importing more food from those Asian countries, he said, if farmers here are compelled to reduce output because of government policy.
Wilson also noted the rising price of equipment as another concern heading into the 2023 crop year. “Everybody’s asking, do they fix or do they upgrade?”
Williamstown cash-cropper and custom operator Martin Lang expressed concern that “costs are so high that it puts a lot more risk on the table” in the event of a poor yield or if crop prices unexpectedly fall.
Lang said 2023 otherwise looks likely to be profitable, given that crop values are currently high. “But if something goes wrong, say we only get half or three quarters of a crop, or crop prices drop. Most people don’t book everything ahead of time, either … I’m just a little concerned over the risk at the moment.”
“I think it’s the volatility of everything. Fertilizer prices. War in Ukraine. Interest rates. These are all things that are all so volatile,” observed Harding Nelson, a Bourget-area beef producer. “It’s not any one thing. It’s a number of things. If everything goes wrong, you can go from having a phenomenal business and life is good, to all of a sudden, you didn’t make enough on your crops, and your bills are bigger now than they’ve ever been before.”
Morrisburg-area cash-cropper Warren Schneckenburger echoed the concern about rising input costs in an unpredictable world and war in Ukraine. He also pointed to the uncertain impact of rising interest rates on both commodity prices and input costs. “They’re all impacted by interest rates,” he said. “I think controlling costs is the biggest concern.”
Napanee cash-cropper and egg farmer Max Kaiser said his biggest concern was the potential for insect and fungal pests in his fields because of the mild winter and lack of snow at the end of February in his region. Some farmers are already itching to get out on the land, he added.
“I know there were guys talking about getting out there early, and spreading nitrogen. But man, at $700 to $1,000 a tonne, I would not be in a hurry to throw that on the ground to have it washed away by spring rains,” Kaiser said.