As the global nitrogen fertilizer shortage worsens and prices continue to rise, farmers wonder how much it will affect their next planting season.
Global nitrogen fertilizer costs have risen at least 80 per cent so far this year, according to Argus Media.
The price hike is largely a result of the short supply and high demand of natural gas, used to produce two nitrogen-based fertilizers: ammonia and urea. Crop prices are also a variable in the cost of fertilizer, and farmers who’ve made good profits in the last year have increased the demand on fertilizer. The pandemic also didn’t make prices any better, with disrupted supply chains, labour shortages, and inflation on nearly everything.
“The high price of fertilizer has an impact on what I’m looking to grow for 2022 and my spray program. Am I going to put that on my crop, at what stage, how frequently, price is driving a lot,” said Julie Maw of Mooremaw Farms, southeast of Sarnia.
Maw will buy a portion of her fertilizer in December and the rest closer to the Spring.
Few farmers leave their entire fertilizer purchase until Spring, said Maw, adding that last-minute purchases just before planting could lead to further supply chain congestion.
“Over the last five years, I’ve seen more farmers have bulk storage, more than what I’ve seen in the past. That’s an area where they’re focusing some funds, buying in bulk at those key times to save for spring,” said Maw, who is also a Maizex seed dealer.
Maw says fertilizer availability could affect the crops farmers choose to plant. If prices remain high, farmers might reduce fertilizer purchases by planting more soybeans and less corn, which requires a greater application rate of nitrogen.
Maw’s advice is to plan your crops now as input costs for seed and fertilizer continue to rise and “take advantage of early order discounts on fertilizer if possible.”
No one knows what fertilizer prices will be in the coming months. Prices will be high through June 2022 and maybe longer, estimates CEO Mayo Schmidt of Saskatoon-based Nutrien, the third largest nitrogen fertilizer producer in the world. Schmidt said Nutrien is aiming to increase nitrogen production but can’t keep up with the rising demand.
Maurice Chauvin, director of the Essex Federation of Agriculture and farmer in Pointe-aux-Roches, says he’s waiting on his local co-op to come out with fertilizer prices later this month. He purchases his fertilizer in the wintertime because “if you wait until the last minute, it’s most expensive.”
“I think you’re definitely going to see some acres of corn sway away from being produced because of the higher prices. That would not surprise me at all come next growing season,” Chuavin said.
He added: “I expect higher prices for fertilizer. My plan is to continue with my crop rotation that is planned and hopefully the markets are on my side.”