Lumber, bale wrap, rebar, tile drainage, you name it
AYLMER — Rising input costs are the unfortunate flipside of high crop prices otherwise fuelling optimism in southwestern Ontario farm country.
The price of almost everything is going up, from food in the grocery store to fuel and lumber. Plastics have surged in price, more than doubling the cost of tile drainage tubing and bale wrap. We can thank the pandemic lockdowns. There are logjams around the world in the supply chain. Contractors have had to sit in a parking lot to wait for the curbside purchase of one screw. Last year’s COVID outbreaks in meat plants and among labourers working close together have also slowed down production and, in some cases, left crops to rot in the field.
Fertilizer, seed, fuel and chemical costs are all vying for a bigger share of this year’s crop revenues. The trend has become even more apparent over the winter.
“Anyone who booked their inputs earlier, before the run-up in prices last fall, clearly, is in a much better position than people who decided ‘to ride it through’ to spring,” said Steve Twynstra of Twilight Acre Farms in Ailsa Craig. Next season “will be the kicker,” suggested the Essex County Grain Farmers of Ontario director, as “long-tail” input cost increases carry forward to all growers.
“It’s still going to continue to be a margin-based business,” cautioned Twynstra. “And you’re going to have to continue to operate under sound management-based principles.” That means managing increased input costs — including higher land rental prices — and the ever-present potential of a poor crop if the weather doesn’t cooperate.
But the cash-cropping industry’s expected gain — assuming at least an average crop — will ironically mean key cost increases to the livestock industry. “They’ll take it on the chin, unfortunately, at least those who are dependent on feed purchases,” he observed.
Looking ahead, Twynstra also expressed some apprehension over a potential rise in interest rates — as a corollary to rising inflation — which would have a “drastic effect” on the per-acre cost of planting, growing and harvesting crops in the future.
As for those farmers contemplating a barn expansion and other construction projects, material costs are way up — not to mention tight supply, long lead-times and outright shortages in some cases.
Rebar alone has increased 80 to 90 percent in value since last fall, and new price lists are being issued every three to four weeks on steel cladding and other products. Lumber has surged about 300 percent since the start of the pandemic. Aspenite chip board has increased from about $14 per sheet to $65.
“It’s insane,” said Steve Secord, owner of Secord Home Building Centre in Aylmer, recalling that a spruce 2×4 was $5 last year. But now “a regular 2×4 costs over $11. I’ve seen nothing like it. The way prices are, I’m not buying a lot of inventory. I’m just kind of ordering what I need.”
Fibreglass insulation takes two to three weeks to arrive, he said, while the Roxul (rockwool) alternative must be ordered four to five months in advance. He hasn’t been able to get electrical circuit breakers for five months and cedar shims have all but evaporated from the market. “I haven’t seen them in over a month.”
He knows of a contractor building a 50 ft. by 100 ft. barn who was quoted at $10,900 for trusses in February. But that vendor proved unable to deliver, and the price rose to $22,900 when Secord stepped in to fill the order this spring.
He also reported that his treated wood wholesaler called days earlier to announce a 30 percent price hike.
“It’s hard to quote anything, because a quote’s only good for a week,” said Chris Siemon, owner of Keith Siemon Farm Systems Ltd. in Walton.
Specializing in things made of steel like penning, feeding and manure-handling equipment, Siemon said his suppliers have hiked prices by between 8 and 18 per cent in the first quarter of 2021.
“I’ve heard from a fellow who saw the overall price of his barn construction project go up by $200,000,” Siemon offered.