Canada's rapeseed farmers to strain fertiliser stocks

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Publish time: 16th April, 2012      Source: www.efeedlink.com
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April 16, 2012

   

   

Canada''s rapeseed farmers to strain fertiliser stocks

   

   

   

As near-ideal sowing conditions and lofty crop prices drive up planting interest in the oilseed, Canadian farmers'' zeal for planting rapeseed may strain fertiliser supplies, dealers say.

   

   

This spring, farmers are expected to sow a record-high 20 million acres or more of rapeseed -- a fertiliser-intensive crop -- with the new-crop futures price hitting a contract high this week. Total acres of most crops are expected to rise because of dry conditions after two years of flooding.

   

   

Western Canadian farmers have been snapping up nitrogen-based fertiliser and ammonium sulphate in an effort to maximise rapeseed yields, said Dwayne Sharun, regional fertiliser manager for Crop Production Services, a unit of Agrium Inc.

   

   

Ammonium sulphate is virtually sold out across Western Canada at the wholesale level, leaving nothing to restock for retail outlets once they sell out, he said.

   

   

"I think they have enough for spring, but if a whole lot more rapeseed gets planted here last minute, there could be some shortages," said Sharun, who is based near Calgary, Alberta.

   

   

Viterra Inc, the biggest retailer of fertiliser and seed in Western Canada, has seen brisker spring fertiliser sales during the past two and a half months than during the same period in the past two years, said Doug Wonnacott, chief operating officer of agri-products.

   

   

"It promises to be a very strong year for crop inputs," Wonnacott said in an interview. Viterra expects rapeseed plantings of 20-21 million acres in Western Canada, smashing last year''s record high of 18.5 million acres.

   

   

"That increase will result in significantly higher fertiliser requirements," he said. "Because of higher commodity prices, and farmers having cash, our expectation is that application rates will be up as well, regardless of the crop."

   

   

Supplies of nitrogen-based fertiliser may run thin depending on how aggressively farmers plant rapeseed, Sharun said. Farmers also use nitrogen to boost soil nutrients for wheat, barley and corn. There are probably enough supplies for up to 21 million acres, but it''s doubtful there would be enough fertiliser for larger plantings, Sharun said.

   

   

Viterra expects to have enough nitrogen and sulphur on hand, but it appears supplies are tight in the industry, with new customers trying to buy from Viterra, Wonnacott said.

   

   

Rapeseed, the yellow-flowering oilseed, has soared in popularity with farmers for its high returns due mainly to export and crusher demand. Canada is the biggest exporter of the rapeseed variant, used as a vegetable oil. Soils are dry across the prairies, in contrast to flooding the past two springs. This has allowed for brisk fertiliser applications and bigger areas of crops almost across the board.

   

   

Those conditions don''t necessarily add up to a fertiliser shortage, said Kevin Blair, CEO of an independent farm input store in Lanigan, Saskatchewan.

   

   

"I think the manufacturers like to tell you it''s tighter than normal, but in reality ... if it''s tighter, it''s marginally tighter."

   

   

Rob Davies, CEO of Weyburn Inland Terminal in southern Saskatchewan, doesn''t expect a prolonged fertiliser shortage, but said there could be bottlenecks depending on when farmers start planting and applying nutrients.

   

   

"It''s a time-distribution function. So if everybody in Western Canada starts to go in one week, fertiliser supply gets difficult from a logistics standpoint."

   

   

The timing of spring rains, which stall planting in some pockets and allow retailers to replenish supplies, may determine how significant logistical problems might be. Production snags during the winter haven''t helped.

   

   

Yara International ASA''s Belle Plaine, Saskatchewan nitrogen plant had more downtime than usual, while Agrium''s Carseland, Alberta plant was down for six to eight weeks this winter due to a mechanical problem. Retailers hope to have enough fertiliser on hand, Davies said, but are still stinging from a crash in fertiliser prices several years ago that left them holding large, pricey stocks.

   

   

"I think suppliers are not going to be able to promise you all you want, when you want it, in season," Davies said.

   

   

There should be enough rapeseed to go around, but some varieties could sell out, said Wonnacott of Viterra. Sharun expects Crop Production Services to "be down to the last bag" of rapeseed. Rising nitrogen prices - ignited by big US corn prospects - may cap some of rapeseed''s potential gains in seeded area. Some farmers in Saskatchewan are likely to add acres for peas and other pulse crops instead that don''t require nitrogen fertiliser, Blair said.