Despite being assured the border is open for business, local growers and input suppliers are still anxious about spring inputs — and the lack of field work last fall isn’t helping.
Little fertilizer made it to the field last fall, now informally dubbed the “harvest from hell.” Field work fell to the wayside as wet weather left producers scrambling to complete harvest. As of the end of November, Manitoba Agricultural Services Corporation estimated about 438,000 acres of annual crop was still unharvested.
Social and political conditions did little to ease supply worries into 2020. Rail blockades across the country ground rail traffic to a halt and created a bottleneck in shipments of grain, oil and other commodities.
Now, agribusinesses are facing down the COVID-19 pandemic.
Companies like Nutrien and Koch Fertilizer Canada have been quick to reassure consumers that the fertilizer will flow as needed, come planting.
“We are working diligently to ship fertilizer to our customers and fill terminals in Manitoba, Saskatchewan and the U.S. as we would prior to any spring season,” Kelly Simonson, managing director for Koch Fertilizer Canada said.
In late March, Reuters reported that Nutrien was moving product anywhere from two to four weeks ahead of schedule, while Corteva has suggested its retailers keep one to three months’ worth of chemical supplies on hand as a reserve.
At the same time, local retailers say those increased volumes have left them scrambling for space.
Ray Redfern of Redfern Farm Services used the example of a 2,000-tonne shipment of urea, slated to arrive in Manitoba in mid-March. Redfern and his staff were quickly forced to get creative with storage options.
“Some of that was solved by having more space. Some of it was solved by having more product get to the customer,” Redfern said, noting there was already more fertilizer on farms than there was a year ago.
He said the goal is to create “… enough Canadian space somewhere.”
“In this case, at the grower’s door,” he said.
Why it matters: Agri-retailers were already expecting to move more fertilizer this spring. Now, COVID-19 concerns, social distancing in the transport industry and tightened border traffic have added yet another worry.
Redfern’s company has been asking producers to take more product on farm than what would normally be shipped at once. The move is both to open up more storage room and limit “rush interaction” at their retail locations, given recent pushes for social distancing, he said.
Manufacturers have also noted the problem.
“There is a limit to storage capacity and farmers rely on in-season production and shipments to meet all of their spring needs,” Simonson said. “For our part, we will have shipped as much as possible prior to the start of spring applications.”
The Canadian Association of Agri-Retailers says companies have secured most of their inputs for the spring, although it has begun urging members to deliver on farm in order to avoid distribution delays.
“Canadian agriculture production will likely experience distribution and delivery constraints,” association executive director Mitch Rezansoff said, although he also noted that the association has not seen, “any seed, fertilizer or crop protection product disruptions or shortages at this time.”
Redfern says his suppliers have also reassured him that rail transport of fertilizer will be uninterrupted, despite higher volumes and tensions around the border.
“We’ve not been led to believe that rail transportation has been impacted to any known degree yet, other than the catch-up,” he said.
He argued that even that catch-up is less pronounced than in some sectors, since fertilizer rail shipments out of the U.S. were not as impacted by February rail blockades in Canada.
In particular, Redfern noted, Nutrien’s improvements to distribution have helped streamline shipments, despite the company’s phosphate now coming solely from plants in the U.S. rather than Alberta.
In 2019, the company closed its phosphate operations in Redwater, Alta., leaving only its processing plants in North Carolina and Florida. The Canadian plant would instead refocus on ammonium sulphate production, the company said at the time.
Redfern said distribution improvements have allowed the company to send larger shipments to local terminals and that delivery time is as good or better than when phosphate was coming out of Alberta.
He is, however, a little more leery of transport over water. Last fall conditions on the rivers disrupted supply and delayed fertilizer shipments, shipments that he ended up not needing, but was then told he had to take.
Truck shipments have also raised Redfern’s concerns.
“There’s a lot more people involved in truck networking,” he said, pointing to social distancing issues. “Plus, at that point then we have to deal with unknown persons arriving at our locations with product.”
The company recently had the topic hit home, after a shipment from the U.S. arrived at their doorstep and the driver had direct contact with staff. Staff were unaware at first that the driver was not local, Redfern said, while social distancing measures had not yet been hammered out.
Redfern Farm Services has since tightened up procedures to keep drivers from interacting with staff and avoiding common contacts (such as sharing a pen when doing paperwork), although Redfern says it has impacted the efficiency of his operation.
“We need every one of those key people that we’ve got for this next period coming up to spring,” he said. “I’m reminded of that every hour, about keeping our people safe.”
Banking on spring
Volumes may be flowing to the farm, but those looking to put down anhydrous ammonia don’t have the option of buffering supply.
Redfern says he is crossing his fingers for a normal spring, if his staff are to have enough hours in the week to handle product.
“The number of trucks that we have and the number of wagons that we have for farmers to use is not infinite, so if there’s more to put on, we need more days to do it than we would have done before,” he said, although he noted that his company expects less anhydrous sales this year.
Instead, Redfern is pitching alternative nitrogen sources to his customers.
“In many cases, to take a portion of their farmland and switch it to another form or to put part of every acre on with ESN with the seed where it’s safe and say, well, you’ll have to cover the acres, but you’ll need less fills and if we can’t access as much product as we’d like, then the product that we’ve got will go further,” he said.
Potential spring volatility adds yet another wrench into the supply chain, he noted, since his suppliers want absolute volumes ahead of time, while the spring weather might significantly impact how much anhydrous ammonia his business actually moves.