Ontario Agriculture

The network for agriculture in Ontario, Canada

Potash: BHP or PCS - Which is the best deal for farmers? Farmers of North America Comment...What do you think?

 
Potash:  BHP or PCS - Which is the best deal for farmers.
 
Commentary from FNA-STAG
 
The coverage of the offer by BHP Billiton to buy potash mining giant Potash Corporation of Saskatchewan (PCS) has been missing one very important element - the potential impact on agricultural producers.  This important stakeholder is, after all, the end consumer of the important fertilizer product.
 
There has been full and complete analysis and speculation of the impact of the deal for shareholders, governments, and citizens of Saskatoon and Saskatchewan.  These are all important stakeholders to be sure, but the potential impact of the takeover on the farmer who uses that potash seems to have been left out of the mix. 
 
Bob Friesen, CEO of FNA-STAG, comments, "Have either of these companies talked about their farm customers yet?  What effect would this deal have on farmers?  Fertilizer costs are one of the biggest expenses for most farmers, but there hasn't been any talk about retail pricing and the impact it has on farmers' ability to grow the crops that feed the world".
 
Farmers are in a bad position compared to the fertilizer companies who set prices based on what they think they can extract from farmers for crop nutrients.  Add to that the small handful of potash companies out there, and you have a situation where the farmer has no choice but to pay the price that's given.
 
In June, 2008, according to a Bloomberg report, potash jumped to $650 a metric ton from $190 a year earlier.  This was in response to rising grain prices, including corn and soybeans, two major crops that use potash.  Friesen points out, "When a farmer finally catches a break and the price of grain goes up, the fertilizer companies go right after that margin by increasing the price of fertilizer." 
 
Friesen continues, "When the price of grain went up in 2008, there was a perceived food shortage and farmgate prices were blamed for some people having to go hungry.  Yet there were reports of some farmers around the world not producing because they could not afford to buy the requisite fertilizer".
 
FNA-STAG questions which company would be the best for farmers.  PCS's history of managing production to increase the price may be good for shareholders, but it has a negative impact on the price for farmers and the price of food.  It seems unlikely that they would change this monopolistic behavior.  As the potential new owner, would BHP continue the same price strategy that is used by PCS, or would they increase production and sell higher volumes?  This important question has so far not been addressed.
 
FNA-STAG also urges the Governments of Saskatchewan and Canada to consider their farm constituents and use whatever tools they have to ensure the interests of farmers and input costs are considered.  FNA-STAG's number one priority is farmer profitability and believes profitable farms are just as important to the economy as mining companies.
 
As the debate about the future of these two companies goes on, FNA-STAG would like to ask both PCS and BHP:  Do either PCS or BHP care about the impact that fertilizer prices have on farmers and what are you planning to do about it?
 

Views: 142

▶ Reply to This

Replies to This Discussion

As you can see by the response no one cares. You know that the price is going to go up who ever buys it. And I bet ten to one the Saskatchewan and Canadian governments will buy shares with your tax money to get the lions share out of the higher prices you will be paying, after the deal is done.

▶ Reply to Discussion

RSS

Agriculture Headlines from Farms.com Canada East News - click on title for full story

Choosing Malting Barley for 2027? Market Demand Could Be Key

Canadian malting barley acres are shifting toward newer varieties. CDC Churchill reached 13.7 per cent of Western Canadian acres in 2026, while AAC Synergy retained the top spot at 37.6 per cent. Recommended Varieties

China extends tariff relief for peas, canola meal

China has extended significant tariff reductions on Canadian peas, canola meal, lobster and crabs for another two years after a meeting in Beijing between Chinese officials and International Trade Minister Maninder Sidhu. The announcement, part of a deal struck recently, removes a cloud of uncertainty that had been hanging over Canada’s agriculture and seafood sector. The tariff reductions, set to expire on Dec. 31, have been extended to the end of 2028, Sidhu said in a statement from Beijing. The suspended tariffs include 100-per-cent levies on peas and canola meal and 25-per-cent on lobster and crab. Shipments of these products for the first eight months of the year reached $1-billion, according to Sidhu’s office. “This extension gives farmers, producers and harvesters predictable access to the Chinese market, and it’s how we will grow our exports to China by 50 per cent by 2030 to create good-paying jobs and new opportunities for businesses across Canada,” Sidhu said.

Cyclists in another Ontario town worried they’ll lose some bike lanes

The Great Bike Lane Battle of Ontario™ isn’t just happening in Toronto. We’ve already seen several places in the province who are fearful that some of the Toronto removals, and plans to remove more or kibosh future lanes, might affect them. It began over two years ago when Premier Doug Ford’s government passed legislation that changed the way municipalities can create bike lanes. Essentially, the province can now dictate the way towns or cities can create cycling infrastructure that may reduce car lanes. The bill also quite specifically targeted several sections in the city which it planned to remove lanes. After a long legal battle—which included a Charter challenge put forth by cycling advocates, which was ultimately appealed and won by the province—the first round of lane removals began. The Ontario bike lane brouhaha In early October, crews set out to get rid of a 1.2-km section of protected bike lanes on Bloor Street West in the west part of the city. For days, cyclists and s

Eggs of invasive moth detected for the first time in Great Lakes region in Detroit, U.S. says

The eggs of an invasive moth known to be a voracious consumer of trees have been discovered for the first time in the Great Lakes region on a vessel in the Port of Detroit, according to U.S. Customers and Border Protection. The U.S. Department of Agriculture (USDA) confirmed the specimens came from two distinct subspecies of the flighted spongy moth complex native to Asia. The steel-carrying cargo ship had arrived in Detroit from South Korea via Hamilton. “It's very concerning because … spongy moth is one of those moths whose caterpillars feed on the foliage of a large number of tree species,” said Richard Hamelin, a professor of forestry at the University of British Columbia. He worked with the USDA and the Canadian Food Inspection Agency on a DNA test to differentiate the Asian and European varieties of the moth. “My guess is that this [is] being an alarm … bell … because … if there's one ship that had eggs, then … there was … some kind of a breakdown in the inspection or maybe t

Lambton County farmers near end of harvest thanks to favourable weather

Ideal fall conditions have allowed Lambton County producers to bring a smooth and successful harvest near the finish line. Lambton Federation of Agriculture President Mike Belan said the soybean harvest and winter wheat planting finished really well thanks to a long stretch of nice weather. He said area farmers, including himself, have made good progress harvesting corn since with average to above average yields being recorded. "We just finished up last week and I think probably, if you went around the county, we'd be probably 85 to 90 per cent wrapped up on corn harvest," said Belan. "The first part of November has been exceptionally well weather wise." Belan said everyone he talks to has been eager to collect their crops. "November's notorious for having a large snowfall or getting wet and staying wet for the rest of the month," he said. "So, you take advantage of the nice weather when you can." With flurries starting to show in local forecasts, Belan said extra effort is being

© 2026   Created by Darren Marsland.   Powered by

Badges  |  Report an Issue  |  Terms of Service