May 5, 2010 / 3:26 PM / 9 years ago

Canola, weather seen raising Canada fertilizer use

 * Record crop seen for canola, which needs nitrogen
 * Farmers had cut back on fertilizer last year
 By Rod Nickel
 WINNIPEG, Manitoba, May 5 (Reuters) - Canadian farmers are
set to use more nitrogen fertilizer than they did last year as
favorable growing conditions boost optimism and as they plant a
record acreage of nutrient-needy canola, trade officials say.
 Farmers balked at paying high fertilizer prices last year,
which left Canadian retailers with costly inventory write-downs
and weighed down earnings of producers like Potash Corp of
Saskatchewan POT.TO POT.N and Agrium AGU.TO AGU.N.
 Global demand is seen recovering in 2010 largely because
soils need replenishment.
 In Canada, the world's No. 6 wheat producer and top canola
exporter, optimism from warm April weather and timely rains
make a rebound in fertilizer demand more likely, officials
say.
 "Because most of the country is out of the gate (planting
crops) earlier, there's general optimism that this is the
season to make your investments and, therefore, drive a
stronger yield," said David MacKay, president and CEO of the
Canadian Association of Agri-Retailers.
 Nitrogen and phosphate are the most widely used crop
fertilizers in Canada because potash is generally present in
western soils. Spring and fall are the key times for applying
fertilizer.
 "(Spring demand) certainly is far improved over last year,"
MacKay said.
 Farmers intend to plant a record 16.9 million acres of
canola this spring, according to Statistics Canada. However,
many traders and analysts think that area will be even bigger.
 "I would think this year would allow people to get back to
more normal fertilizer rates, at least for canola anyway." said
John Mayko, senior agronomy specialist for the Canola Council
of Canada.
 Canola is a large user of nitrogen, but also requires more
phosphate and potash than wheat, said David Asbridge, president
of NPK Fertilizer Advisory Services.
 "Fertilizer use in Canada should be fairly robust this
year," he said. "A shift from wheat to canola will likely push
fertilizer use higher as long as yields are comparable."
 However, Ian Wishart, a Manitoba farmer and president of
Keystone Agricultural Producers, sees overall demand static
because farmers aren't pleased with either fertilizer costs or
grain prices, which are sharply lower than a year ago.
 Farmer demand for nitrogen is up slightly because of
canola, he said, but increased plantings of pulse crops, which
use little fertilizer, has held overall demand in check. 
 "Guys are being pretty cautious about how much they're
applying, is the feel I get," Wishart said.
 Potash and phosphate prices are lower than a year ago,
while nitrogen prices vary depending on the source, Mayko
said.
 Retailers, who were stuck with large inventories of
fertilizer after prices and demand slumped, are also taking a
cautious approach by keeping supplies short this year, MacKay
said.
 Agrium, a fertilizer producer and retailer, said on
Wednesday that a rebound in North American and international
nutrient demand supported its wholesale business in the first
quarter, while its retailers are seeing a strong spring for
crop inputs.
 (Editing by Walter Bagley)


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