Western Canada floods seen crimping fertilizer flow to farms

Thu Apr 11, 2013 3:01pm EDT

Related Topics

* Much snow left to melt ahead of planting season

* Agrium sees two- to four-week planting delays

By Rod Nickel

WINNIPEG, Manitoba, April 11 (Reuters) - Fertilizer makers may be hard-pressed this spring to move their yield-boosting products to Western Canadian farmers during a shortened planting season, as the potential for major flooding grows.

Cold weather has delayed the melt of heavy snowpack in the provinces of Manitoba, Saskatchewan and Alberta, raising the risk that floods in late April and May will keep farmers off their land.

Once their fields dry out, farmers are expected to have a tight window for planting crops such as canola and wheat, and applying fertilizer.

"There's a lot of (farmers) staring out the window and pondering what the spring is going to look like when they get on the field," said Kevin Helash, a vice-president with Agrium Inc , which produces fertilizer and sells it at the retail level under the name Crop Production Services (CPS).

"What we're getting ready for is everyone getting on the field at more or less the same time, and being very, very rushed."

Western Canada's planting season usually starts in late April and extends into early June. Helash sees planting across the Prairies, except for southern Alberta, beginning two to four weeks behind schedule.

Farmers are hesitant to plant late for fear that their crops will still be maturing in early September, when the first damaging frosts usually occur.

The biggest challenge will be moving popular nitrogen fertilizers during a shortened season from Western Canada plants owned by Yara International ASA, CF Industries Holdings Inc and Agrium to hundreds of retail outlets, said David Dow, who owns two stores and is chairman of the Canadian Association of Agri-Retailers.

Retail suppliers normally have a seven-week spring season to move fertilizer from the plants to the farmer, but that period looks to be as short as three weeks this year, making it a challenge to find enough trucks to do the job, said Dow, who has built more storage facilities to ease the potential bottlenecks.

Yara, which runs a nitrogen plant at Belle Plaine, Saskatchewan, is extending hours at its external warehouses and plans to move truck drivers to the areas of greatest need during spring, said Brian Kenyon, Yara's director of sales and marketing for the northern Plains.

"I understand the angst of the customers that are worried about whether we will be able to get the product to them, and that's a very valid concern," Kenyon said.

"If we try to plant everything in two weeks because we don't get started until the middle of May, yeah, there's a lot of challenges ahead of us."

WASHOUT

Nitrogen, in forms such as dry urea, liquid UAN and anhydrous ammonia, is Western Canada's most widely used fertilizer, but farmers also apply phosphate.

Mosaic Co Chief Executive Jim Prokopanko acknowledged to Reuters on March 28 that significant floods could affect movement of phosphate to the region, where Mosaic was already having trouble moving potash to port because of heavy snow.

Washed-out roads also make moving fertilizer a big challenge. The governments of Saskatchewan and Manitoba said this week that there is potential for major flooding, depending on how fast snow melts and how much more precipitation falls.

The Prairies received well above normal winter snowfall, with most of Saskatchewan's growing area collecting 1-1/2 times to more than twice as much precipitation than usual.

Every stage of moving fertilizer is tricky in wet conditions, including from farmyards to saturated fields, said Greg McDonald, general manager of Grow Community of Independents, a small group of crop supply dealers.

Farmers and suppliers are wondering how many of those fields will be too wet to plant at all this year, he said.

Canada's western provinces produce most of the country's wheat, canola, barley and oats. Widespread flooding was last seen in 2011.

Farmers apply most of their fertilizer in spring or in autumn, but last fall was wet and conditions were poor for applying anhydrous ammonia, said Steve Biggar, assistant vice-president of fertilizer and energy products for Richardson International Ltd.

"This spring is also going to be challenging just because it's going to be later, and so it will be tougher to catch up," he said.

CF Industries, majority owner of Canada's largest nitrogen fertilizer plant - Canadian Fertilizers Ltd at Medicine Hat, Alberta - declined to comment, as it is in its quiet period ahead of releasing quarterly results.

Based on CPS's seed sales and talks with farmers, Western Canada is likely to sow less canola and more wheat, barley and peas, Helash said.

Canola is a lucrative crop for farm retail and fertilizer companies, since it requires large amounts of nitrogen.

FILED UNDER: