Perfect weather in eastern Ontario coincides with higher commodity prices and lower input costs

By Terry Meagher

MOOSE CREEK — Prices for corn are high, fertilizer prices are low, and Ontario farmers are experiencing a spring Florida used to boast about.

Fertilizer prices are running under $500 per tonne, about half of last year, says Alain Leduc, a crop farmer at Moose Creek in North Stormont. He has forward contracted most of his 2010 corn crop between $170 and $190 per tonne and says he can make a profit at that price even if the crop turns out poorly.

"Some farmers wait for a higher price," he says, "but I sell when I can see a profit." Other farmers hold off selling their corn fearing the crop might fail and they’ll be left making up the shortfall.

"We’ve always had a crop," he says. "If you take a $5 hit (per tonne) or a $10 hit, you can still make a profit." He points out that there is only so much money in a crop and the farmer who manages wisely gets a bigger share than those who don’t.

He started as a part-time crop farmer, but now plants 4,000 acres, about 1,800 acres in corn. He plants 400 acres in wheat and the balance in IP (Identity Preserved) soybeans. "When I was at Kemptville College, they told me to go big or go home," he said. He decided to go big."

Last year, when potash doubled in price, he like many farmers bought his potash in the U.S. but this year he’s buying locally and no longer skimping on fertilizer. Last year he cut his potash application by 80 per cent.

Buoyed by higher corn prices in 2006, Potash Corp. jacked its prices and its net income increased by 102 % from 2006 to 2007. But farmers balked and the stock prices receded. Last winter, most analysts were predicting prices of fertilizer would rise again, but according to The National Post in the third week of April the pricing momentum had stalled.

Leduc expects some tough times ahead. Foreign carryover stocks and yields look high, but on the positive side Quebec and U.S. governments have cut back their subsidies. That means Ontario, which never had the same level of subsidies, can compete more easily. Leduc says the Chicago Commodity Exchange will now better reflect the true price of the corn crop.