(Resource News International) — Cropping choices by Canadian farmers
this spring may not necessarily be impacted by high energy costs
as they have in the past, with the offsetting factor being high
prices.
“Fuel and fertilizer costs are indeed significantly higher
than what they were at the same time a year ago,” said Glenn Lennox, a
wheat analyst with the market analysis division of Agriculture
and Agri-Food Canada in Winnipeg. “But it is doubtful that these higher
input costs are going to impact spring seeding decisions
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He said producers need to use fuel and they need to use
fertilizer when they plant.
Some crops use a bit less fertilizer than others and will
likely influence some planting decisions, Lennox said. However,
the difference this spring in comparison to other years is that
values for all the crops are high enough to offset some of the
jump in inputs, he said.
“Crops like canola can be locked in at over $12 a
bushel, so the cost of fertilizer becomes somewhat irrevelant at
this kind of value,” Lennox said. “The grower is also looking at
that high value for canola and in turn is planning to maximize
yields by making sure the right amount of fertilizer is applied.”
Lennox said that as long as prices remain at attractive
levels, it will not affect the usage of fertilizer at all, as
input costs are only a small portion of the total value of the
crop.
Ray McVicar, a crop specialist with Saskatchewan Agriculture in Regina, felt the high input costs could cause a move toward
crops such as peas and lentils, which do not have high fertilizer
requirements.
Neither crop requires the input of additional
nitrogen, he said, as they both supply enough for the plant to grow and
even put a little extra back into the soil.
However, McVicar agreed prices for the various crops,
including specialty crops, are generally high enough to help
offset the cost of the jump in farm inputs.
“Maximize inputs”
“In order to maximize crop returns, producers will need to
maximize yields, and in order to do that they will need to
maximize crop inputs, including nitrogen,” he said.
Wheat and canola are two such crops that require a huge
amount of fertilizer.
“Certainly the producers who did not think ahead and cover
their input needs for next spring could still have their mindset
changed when it comes down to considering seeding a crop like
canola,” said Mike Jubinville, an analyst with the farmer advisory service ProFarmer Canada.
However, he also felt that if producers have locked in a
value above $12 a bushel, they will still be able to make some
money despite the high fertilizer costs.
Jubinville also felt acreage in the spring will be
based on agronomic indicators and not necessarily economic
“Canola is a commodity that despite the high cost of inputs,
producers want to plant, so I would be incredibly surprised to
see acreage back off this spring,” Jubinville said.
He also indicated that while the high cost of inputs can be
a factor in planting decisions, producers grow crops according to
rotation needs.
Fertilizer prices have been on the rise across Western
Canada, according to David Rolfe, president of Keystone
Agricultural Producers (KAP) in Manitoba.
In fact, fertilizer values have risen by such an extreme
amount, his association has called on the federal and provincial governments to launch an
investigation into the cause of what it called constant, unexplained price
hikes, and discrepancies in prices between the Canadian Prairies
and the northern U.S. states.
Supply companies expect farmers will pay
through the nose to try to capture the higher grain prices, he said.
