Fertilizer: The long view | Farmtario

Supply is tight but flowing and the product is costly but available. Given current domestic and international realities, the same is likely to be said about fertilizer in spring 2023. 

Making specific predictions about the markets for fertilizer is difficult, particularly for nitrogen, but there are ways to improve supply chain resiliency. 

Russel Hurst, executive director of the Ontario Agri-Business Association, says continued high commodity prices, high energy costs, the Russia-Ukraine war and other factors all suggest high fertilizer prices in 2023. 

Why it matters: High fertilizer prices are expected through 2023 as supplies are affected by multiple global factors.

“We’re still six months from spring. Supply chains work efficiently. When they don’t, it’s because things happen at the 11th hour,” says Hurst.

Supplies of phosphorus and potassium are expected to remain stable.

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“Realistically, most of the phosphorus used in Eastern Canada is, for the most part, coming from the United States…that’s not a huge supply issue. The hurricane that went through Florida is a minor disruption. Most potassium comes from the West, and those production facilities are running at full tilt.”

Nitrogen supply is a different story. Most of Eastern Canada’s nitrogen supplies come from the Baltic and Black Sea regions of Europe, where political tensions and armed conflict are forcing fertilizer purchasers to source from elsewhere. Supplies are tight, particularly for liquid nitrogen. The 35 per cent import tariff remains in place for Russian nitrogen, too.

“The reality is nothing has really changed from last year,” says Dale Cowan, agronomy strategy manager and senior agronomist with Agris Co-Operative.

Having a close relationship with fertilizer suppliers and planning ahead are the priorities, he said. Fertilizer suppliers are doing the same as they try to generate consistent flow in the face of political tensions and lingering pandemic effects.

“Everything has to be carefully planned out. Crop rotations [for spring] might be up in the air. I’d say logist=ics are a little better than they were. Lead times might be a bit longer,” said Cowan.

“One of the biggest unknowns is natural gas in Europe. Europe basically mothballed its fertilizer production. There are probably a few more unknowns but the industry has adjusted the supply chain.”

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Greater resiliency in Ontario’s fertilizer supply chain would be helpful but that’s unlikely, considering the number of variables within the current system, said Hurst.

Greater storage capacity is often prescribed as a remedy but that has to happen at the farm and retail level, and different retailers and individual farms have widely varying storage capacities.

Hurst also said it’s critical to consider that Ontario does not have the natural resources, such as Alberta’s natural gas or Saskatchewan’s potash, required to manufacture fertilizer. Even if Ontario were to spend billions on fertilizer manufacturing, supply problems would remain.

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“What can we control and what can’t we control? What we can’t control is access to natural resources to any great degree. But what we can do is add value to the fertilizer,” he said, citing the partnership to create controlled-release fertilizers between Solio and Georgia-based company Pursell as an example.

Innovation is the current focus of the provincial government’s Fertilizer Accelerating Solutions & Technology Challenge, a two-year, $2 million commitment to support made-in-Ontario solutions to increase the availability of fertilizer options, alternatives and technology.

According to a Sept. 23 press release, the investment aims to achieve “immediate and long-term innovative solutions” that will help Ontario farmers reduce dependence on imported fertilizer.