High fuel costs, demand for fertilizer driving up costs for Canadian farmers

Jun 16, 2022

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The cost of living has gone up for all Canadians. But for those who produce food on any of the tens of thousands of Canadian farms, they’re feeling the pinch, too, with fertilizer and diesel prices skyrocketing in recent months.

Farmers were among the first to see the impacts of Russia’s invasion of Ukraine. Because those two nations are among the world’s largest wheat producers, the shock to the markets was felt in Canada, with high demand and high prices for Canadian grain.

Both are also among the largest exporters of fertilizers, and the invasion has led to high prices for fertilizers around the world. Buying fertilizer is one of the single largest input costs for farmers each year and not only did they have to worry about prices, there were fears they simply wouldn’t be able to get enough of the product needed to produce good yields.

The average Canadian grain farmer — wheat, canola, barley, oats — would have spent $60 to $65 per acre on fertilizer in 2021. This year, costs are more like $130 to $140 per acre, according to estimates from Fertilizer Canada. For the average farm, according to Statistics Canada, of 778 acres, that means an increase of about $56,000.

Tara Sawyer, who farms near Acme, Alta., about 85 kilometres northeast of Calgary, said prices doubled or tripled, depending on when folks were able to buy.

“That was certainly a huge hit this year,” said Sawyer, who’s also the chair of Alberta Barley.

It’s not just fertilizer, though. Fuel costs, both diesel for tractors and other machinery, and natural gas for grain drying, are going to be issues for farmers in the months ahead. It’s not just market prices, either — Sawyer pointed to the carbon tax as an additional burden for farmers buying tens of thousands of litres of fuel for seeding and harvest.

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