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: 103

▶ Reply to This

Replies to This Discussion

Permalink Reply by Bristow on October 7, 2010 at 11:59am
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

U.S. Farmer Sentiment Erodes Further in June

Farmer sentiment declined again in June, as producers became less optimistic about both current conditions and the year ahead, according to the latest Purdue University-CME Group Ag Economy Barometer on Tuesday. The barometer fell to 113 points in June, down from 119 in May. Both major components of the index weakened, with the Index of Current Conditions dropping five points and the Index of Future Expectations falling seven points. The current conditions measure was 26 points below its December 2025 level and reached its lowest point since December 2024. The June survey, conducted from June 15 to 19 among 400 farmers across the U.S., showed high input costs remain the dominant concern. Of the respondents, 47% listed high input costs as their biggest worry, well ahead of low crop and livestock prices at 23%. In a related question, 42% of farmers said high input costs were the main factor limiting improvement in their farm’s financial situation this year. Low output prices were c

Alberta Crops Continue to Improve, But Too Much Rain Is Becoming the Bigger Concern

Alberta crops are generally in better shape than they were a year ago, but for many producers the conversation has shifted from needing rain to finding a break in it. The latest Alberta Crop Report, covering conditions as of June 23, shows provincial crop ratings edged up to 69 per cent good-to-excellent, comfortably ahead of last year’s 50 per cent and above the five-year average of 64 per cent. While that’s encouraging, excessive moisture is beginning to create a different set of challenges across parts of the province. Frequent rainfall has delayed herbicide applications, slowed crop development and left some low-lying fields saturated. Producers in central and northern Alberta continue to report standing water and uneven emergence, while cooler-than-normal temperatures have limited crop growth despite generally favourable soil moisture. The regional picture remains mixed. Southern Alberta continues to post some of the province’s strongest crop ratings, with timely rainfall sup

Alberta Crops Are Primed for a Big Year—If Farmers Can Get Into Their Fields

By the time the calendar turns to July, Alberta farmers usually have a pretty good sense of what kind of crop they’re growing. This year, the answer depends largely on where you farm. The latest Alberta Crop Report shows much of the province heading into July with excellent yield potential thanks to abundant soil moisture. Provincial crop conditions remain well above long-term averages, and hay and pasture are responding to the moisture. But there is another side to the story. Frequent rainfall, saturated fields and limited spraying opportunities are creating mounting concerns over disease pressure, weed control and delayed crop development in several regions. While moisture has largely replaced drought as the dominant concern, too much water is becoming its own production challenge. Moisture Is No Longer the Limiting Factor Across much of Alberta, crops have access to plenty of water heading into one of the most important months of the growing season. Surface and sub-surface mo

Deere partners with ASW Distillery on spirits

Fiddler Combine Bourbon and Fiddler Steel Plow Rye helps celebrate American ag

Global Oil Output Rebound Expected as EIA Forecasts Lower Fuel Prices Through 2027

The latest U.S. Energy Information Administration outlook points to increased global oil production and lower energy prices over the next two years.

© 2026   Created by Darren Marsland.   Powered by

Badges  |  Report an Issue  |  Terms of Service