Statistics Canada reports farmers spent over $11.5 billion on expenses for grain and livestock production in Saskatchewan last year. That was 11 per cent higher than 2020 and the largest year-over-year increase since 2012.
The Agricultural Producers Association of Saskatchewan (APAS) did some number crunching and calls it the most expensive year ever for farmers.
The number one farm operating expense prior to depreciation was $2.67 billion for fertilizer–and that was prior to the war between Russia and Ukraine.
APAS also notes since 2019, glyphosate has increased 62 per cent, fuel is up 52 per cent and the price of anhydrous ammonia is 113 per cent higher.
APAS President Ian Boxall from Tisdale says the rising cost of farm inputs as well as supply chain issues were the biggest concerns during fall district meetings. Boxall says there is a lack of transparency to judge if certain price increases are warranted—citing diesel fuel as one example. Prices have risen sharply recently and do not appear to be connected to the price of oil.
There are also questions about fertilizer being sold at international prices even though a good portion comes from Western Canada.
The House of Commons Standing Committee on Agriculture will soon begin a study on food inflation and prices at the retail level. Boxall believes farm input costs should be examined by the all-party ag committee as well.
CJWW Agriculture Director Neil Billinger spoke to Boxall on Tuesday morning;
Key Takeaways
• Saskatchewan farm cash expenses totalled $11,508,359,000 in 2021, a record
since reporting began in 1972.
• Fertilizer represents the single largest operating expenditure for producers and
its share as a proportion of overall costs is increasing at faster rate than other
expense categories.
• Farmers are particularly exposed to cost of production inflation due to their
dependence on energy-intensive inputs, such as fuel and fertilizer, which are
experiencing significant volatility, relative to other goods and services in current
market conditions.
• Inflation in production costs represents several challenges for Saskatchewan
producers who are price-takers in international markets and subject to weather
and climate related production risks outside their control.
• The extreme price increase for critical farm inputs is concerning and warrants
more information and analysis to better understand the factors causing price
volatility.
• The rising cost of production is major concern for producers who want more
transparency to better plan their business operations and make informed
purchase decisions when buying inputs.
