CNS Canada — A shutdown at Agrium’s nitrogen facility at Carseland, Alta. is threatening to slow down what was already a troubled shipping-schedule of fertilizer supplies across Western Canada.
The N plant suffered a failure of its auxiliary boiler in late March. The facility isn’t expected to restart production until the second half of May. In the meantime, Agrium expects it will result in lower product availability of urea by approximately 100,000 tonnes and ammonia by roughly 20,000 tonnes in the second quarter of 2014.
Logistics problems, caused by the rail slowdown, had already strained what supplies of fertilizer there were on the Prairies.
Doug Chorney, president of Manitoba farm group Keystone Agricultural Producers, said the plant breakdown will hurt more than usual, due to its timing.
“Prices are going up, supply is going down,” he said, adding some dealers have told customers they’re going to refund their key purchase monies because they won’t be able to supply them this spring.
Chorney’s contacts tell him the wholesale distribution network is at minimal inventory because of transportation problems they’ve seen with grain.
The situation isn’t any better in Saskatchewan. Norm Hall, president of the Agricultural Producers Association of Saskatchewan, said he and his colleagues recently phoned around to see what prices were like.
Many dealers said N would go for $800 per tonne, if they had any. Railway problems had already begun to deplete supplies before this latest breakdown.
The situation is bad for phosphate fertilizer too, he said.
“We were in conversation with one company and they weren’t expecting the next train unit of phosphate to come in until May 25,” he said.
Hall said he expects producers who have already bought and paid for their fertilizer will get it, but it take time. Producers who can’t store any fertilizer run the risk of having the companies ration it to them, he added.
Railways are also focused on moving grain right now, he said, and don’t appear to have much time for fertilizer shipments.
“It just shows the need for more production facilities to be built here in Western Canada so we’re not so dependent on imports,” he said.
Chorney said he has talked to the Manitoba government about preparing extension services for producers who will likely be forced to top-dress their crops with whatever supplies they have now.
“It’s certainly not desirable and not the best option. It creates extra costs but you have to have fertilizer to grow a crop and that’s a fact of life.”
Chorney said he also asked the government to relax road restrictions for fertilizer this spring, similar to what’s happening with grain.
— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.