High cost of fertilizer eating into profits, causing food prices to rise, local farmer says

Some farmers in Ontario are partly blaming the Canadian government for a much higher cost of fertilizer that's squeezing profits and leading to higher grocery store prices.

Canada has imposed a 35 per cent tariff on almost everything coming from Russia due to the ongoing conflict with Ukraine, including nitrogen fertilizer. Before the tariff was imposed, roughly 85 to 90 per cent of the total fertilizer applied in Eastern Canada came from Russia. 

"We can probably bite the bullet for a year or two maybe, at the most," said farmer Leo Gilbeault, who's also president of the Essex County Federation of Agriculture.

One year ago, Gilbeault recalls paying $400 per metric tonne for fertilizer. Due to supply and demand issues during the COVID-19 pandemic, that's ballooned to more than $1,000 per metric tonne, he said. Now, it's an extra 35 per cent due to the tariff imposed by the federal government in March.

To help grow his soybeans, corn and wheat, fertilizer has become even more important this year because of the lack of rain.

The Canadian tariff, something he wants the government to remove immediately, means it's costing a lot more to feed his crops. That cost travels all the way to the grocery store and by extension, the cost for Canadians to feed their own families, Gilbeault said.

"Whoever is buying our corn has to pay more, that increases their cost of production, which they pass on to the processors, which passes it on to the grocery store chain, which passes on to the consumer," said Gilbeault. 

Since the wheat he grows is used as animal feed, the cost of fertilizer may also indirectly increase the price of beef, he said as an example.

In March, Agriculture and Agri-Food Minister Marie-Claude Bibeau said the government was investing in the fertilizer industry by funding research and innovation and helping farmers find new suppliers.

Irek Kusmierczyk, Liberal MP for Windsor-Tecumseh, said he's bringing farmers' concerns to ministers in Ottawa.

"I think we're very much aware of the challenges that farmers are facing right now, the least of which is accessing fertilizer, the cost of fertilizer, the cost of basics," said Kusmierczyk. "Much of that is supply chain problems around the world, but it's also accelerated or accentuated or increased by Putin's illegal war."

But Gilbeault said farmers shouldn't be punished because of Russia's actions and he questions why Canada is the only G7 country that's imposed a tariff on Russian fertilizer.

"That doesn't make sense," said Gilbeault

"It puts us at an unfair competitive advantage, we'll say, especially with the United States. Why Canada chose to do that and other G7s didn't, is still something we're trying to figure out and trying to get them to change their mind," he added.

In the meantime, farmers have been using fertilizer sparingly because it's so expensive. But Gilbeault said that leads to a smaller yield and less food.