PRICE SHOCK
Fertilizer prices are the talk of the coffee shops
By Patrick Meagher
WINCHESTER — Many farmers waited to the last minute to buy fertilizer this year in hopes of getting a better deal. As expected, prices did come down for farmers who shopped around but not as much as they would have liked.
"Prices were terrible, terrible," said Picton crop farmer Lloyd Crowe. "I’ve done more investigating of prices and getting quotes this year than I’ve ever done in my life. But it paid off to get the quotes."
In the past, he said he has simply trusted his supplier. Seems those days are over.
Potash was so expensive, Crowe didn’t even bother to buy. "We’re just not going to put on any potash even though the soil says we should," he said.
Crowe expected to plant 2,000 acres of corn and 2,000 acres of soybeans this year.
With input prices so high, in some cases doubling in price over last year, Crowe said corn producers are counting on strong yields to pencil out a profit. He added that thanks to the bulk-buying of Saskatchewan-based member-driven Farmers of North America, it put downward pressure on price.
The main three fertilizer products — Nitrogen (urea, UAN liquid nitrogen), phosphorous and potassium (potash) — have risen dramatically and corn is the biggest consumer. Overall, fertilizer prices increased 128 per cent from October 1, 2007 to Oct.1, 2008, says an OMAFRA study.
Bill Lillico, of Winchester, said urea was too expensive this year – about $800 a tonne. He shopped around for UAN (liquid nitrogren) and said he started negotiating at $650 a tonne, finally settling at $450 with a local supplier. "We had to do something. The profit margin wasn’t there." Negotiating down saved him $50,000, he figured.
He went back to his regular dealer in the end because you can’t beat the dealers for service, he said.
Fertilizer is the talk of the coffee shops. "Everyone’s talking about fertilizer," Lillico said. "This was the hardest year in which we’ve ever negotiated price. We’re not putting on as much phosphorous. We can mine the land for a year, though we don’t like to do that"
Maxville-area dairy farmer Rene Schurmann planted high-moisture corn but said crop farmers would need a high price for corn to make money due to high input costs. He paid $850 to $1,050 for a blended fertilizer. "For me, the price is crazy," he said.
With prices so high, Winchester farmer Donnie Duncan says he brokered a deal to get Russian urea shipped to Canada and was selling it for $600 a tonne. One group of eastern Ontario farmers banded together and bought a large quantity of fertilizer from a U.S. company.
Northumberland County’s Allan Cole said potash is up as high as $1,000 a tonne, while last year price was about $400. "The best price I got was $995, " Cole said. "It’s at least doubled in price. "
A survey of five farmers across eastern Ontario from Vankleek Hill to Port Perry revealed these price ranges, as of April 22:
Nitrogen fertilizer products: $450 to $800 per metric tonne
Phosphorous: $700 to $900 per metric tonne
Potash: $900 to $1,000 per metric tonne
Making matters worse, farmers have found eastern Ontario prices higher than western Ontario prices. "Eastern Ontario prices tend to be more than expected," agreed Ridgetown campus economist Ken McEwan, who studied the price increases.
The only uplifting note is that diesel fuel has dropped in price. "Our diesel fuel is actually cheaper than it was last year," said Cole.