The recent proposed merger of Potash Corporation of Saskatchewan and Agrium has generated much discussion about the merits or pitfalls. I have little knowledge of the backroom dealings of huge corporations but am uneasy about companies becoming too large and competition dwindling.
The final decision will be up to the Government of Canada Competition Bureau who will presumably have all the facts about the companies and other competition in the fertilizer business.
This article is not comprehensive. Many smaller fertilizer manufacturers and suppliers have appeared in past several years and are significant to some growers and areas. Sulfur or a micronutrient can be just as limiting as the Big 3. But this piece deals just with N, P, K and the big actors.
Fertilizers in Western Canada
Almost all graphs that show historical fertilizer sales in our part of the world start at 1960. That is the year I crawled off the Cockshutt 132 combine August 31 with the Milden crop in the bin and started at the University of Saskatchewan around September 15. It has been my good fortune to have lived and worked in the system since early days.
A good summary of the history of fertilizers in Western Canada is in the book Power to Grow written in 2010 by Ed Kowalenko who spent many years in the business. It is a great read. Ed worked many years for Cominco, (now Agrium) and they assisted with printing. It is my hope that it will be scanned and be made widely available. Much of what follows leans heavily on Power to Grow.
Fertilizer manufacture began because of a need to clean up serious environmental pollution. The sulphur spewed into the atmosphere was unacceptable even then. The solution was to make sulphuric acid with it and from that produce ammonium phosphate fertilizer (originally 11-48-0).
That all happened in 1930 at Trail, B.C., by the Consolidated Mining and Smelting Company also known as CM&S, later Cominco. From 1930 to 1955 CM&S was the only game in town for the manufacture and marketing of fertilizer in Western Canada.
Between 1955 and 1970 the following actors were added to the picture:
Sherritt Fertilizers (byproduct of Sherritt Gordon Mines), Northwest–Nitro Chemicals Ltd. (Medicine Hat, Alta.), Western Co-operative Fertilizers Ltd. (Westco, Calgary), Simplot Chemical Company (Brandon, Man.) and Imperial Oil Ltd. (Redwater, Alta.).
After 1970, no new fertilizer manufacturer was added until 1992 when Saskferco was built at Belle Plaine, Sask.
Since then, the fertilizer business has been mostly a matter of buyouts and mergers. It has come almost full circle and Agrium is again the big game in town. Agrium also has extensive Crop Production Services Retail outlets.
Westco was a big actor with the then three Prairie Wheat Pools, Federated Co-op and the retail chain that was already in place. Westco did much good fertilizer research — the data (I think) still rests in Agrium filing cabinets in Calgary. See Grainews April 28, 2014 for more detail about the Westco work.
The future of N, P, K
The merger of PCS and Agrium has been described as a good fit because PCS produces mainly potash and Agrium is more broadly based and with a large retail chain in place.
But, let us look at it from a nutrient perspective and the big picture.
Nitrogen: Nitrogen is still the big one in terms of impact on crops and cost to the farmer. The price spike in 2008 drove new manufacturing capacity, so nitrogen supply should not be a problem. I do not have all the stats but suspect that there is enough nitrogen competition to keep folks honest.
We all know that nitrogen comes from the air and natural gas is the main energy source to fix nitrogen into fertilizer. A few years ago when natural gas prices went into the tank I was mad. Why were we paying so much when gas was way down?
But, then I thought back to the early 70s when the fertilizer industry was in the tank. There was no market for wheat and farmers had no interest in pouring on more nitrogen to grow more wheat they could not sell.
In 1970 I gave a talk at the Western Canada Fertilizer Association annual meeting in Winnipeg. I spent many hours in U. of S. library with Stats Canada (then DBS) reports of fertilizer prices and Saskatchewan Agriculture Annual reports of wheat prices. At that time there was a very strong correlation between nitrogen prices and wheat prices. My message to WCFA was, “Farmers now know that nitrogen fertilizer works. When they can sell their wheat for decent coin they will buy your fertilizer.”
That day came in 1973. Wheat prices skyrocketed and nitrogen prices quickly followed suit.
I have been trying to track down current stats to do a current version of this analysis but I’m having trouble. Our Sask Ag website has been changed and much of the data seems to have disappeared. Maybe a smart young reader will enlighten this old fossil and I can provide readers with the facts in a future article.
Regardless of what determines the price I think we will have adequate nitrogen in coming years and I suspect there will be enough competition to keep the companies honest.
Potassium: The world supply of potassium is enough for many decades to come. It seems the market is now controlled by Russia and that is keeping prices low.
If you are farming Almassippi soils in Manitoba or Carrot River soils in Saskatchewan, potassium is the biggest game in town. No K fertilizer, no economic crop yield. Sandy soils everywhere but especially in parkland and forested areas are also suspect for potassium and as big crops are taken off more acres will come into the deficient category.
The fact is that most Prairie soils are still adequately supplied with potassium and many farmers can pass on applying more potassium with little consequence. For those folks with extremely K-deficient soils, now would be a great time to pork on a big amount of potassium to build the soil supply for years to come.
I see no big issue with K in the foreseeable future.
Phosphorus: Phosphorus is where I see the problems. There are few manufacturers left in Western Canada and the raw product is coming from far away. Long ago, Westco acquired phosphorus rock in the Pacific Northwest but it turned out to be high in undesirables so had to be abandoned.
Until recently we still had the idea the answer to phosphorus was “a little dab will do you.” But, as we started to take off big crops with high nitrogen rates, and had an unprecedented string of years with lots of rain, phosphorus has again become the nutrient to watch. I credit colleagues in Manitoba (John Heard, Don Flaten, Cindy Grant) for putting together a useable resource with interactive tables. (Find information about this online at discovery.gov.mb.ca. Search for “phosphorus.”)
We are wasting a significant potential phosphorus resource in the form of livestock manure. Gains have been made and there are guidelines for application and sometimes soil test phosphorus limits.
But, with all the big money being poured into both crop and animal agriculture I see no evidence of anyone doing basic work to figure out how to make that potential phosphorus resource used more effectively. The City of Saskatoon now repurposes some sewage into a phosphorus fertilizer (Struvite).
A hundred years from now folks will wonder why we wasted so much phosphorus for so long.
The next few months or years will determine if Potashium becomes a reality. If you have strong opinions let the powers that be know.