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: 77

▶ 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

Market Movers to Watch for the Week of April 6

Key reports that farmers should watch which could have significant impacts on commodity markets the week of April 6th, 2025

MU Extension holds short-term operating plan workshops

If key decision-makers on a farm are unable to make decisions for a short time (two weeks to six months), how well would their farm operations continue? University of Missouri Extension will host “On My Own: Planning for the Unplanned” workshops on short-term operating plans to help landowners and farm operators make sound decisions when preparing for the unexpected. “Farmers can be sidelined by health concerns, cognitive issues, accidents and injuries, family caretaker duties, military deployment or anything else that inhibits their ability to make decisions and operate their farm,” Amie Breshears, MU Extension agricultural business specialist, said in a news release. A short-term operating plan provides essential information and structure to keep the farm running until the key decision-maker is ready to resume their role, she said. Participants will leave the series with knowledge of components of short-term operating plans, Breshears said. The program is designed for female lan

Farmers deeply concerned about ag trade

Weaker expectations for the future led to a decline in farmer sentiment in March as the Purdue University-CME Group Ag Economy Barometer index decreased 12 points to a reading of 140, a decrease from 152 a month earlier. The farmer view of the future was decidedly less optimistic in March than in February, as the Index of Future Expectations dipped to 144, which was 15 points less than in February. A weaker Current Conditions Index, which decreased 5 points in March to 132, also contributed to the weakening in farmer sentiment. Reductions in key crop prices since mid-February, combined with concerns about the future of agricultural trade and farm policy, were important factors behind the sentiment shift. Even with the decline in expectations for the future, farmers were still more optimistic about the future than the current situation. The Future Expectations Index remained 12 points more than the Current Conditions Index. The March barometer survey took place March 10-14. Coinciding

Research farm seeks more farmer input

Staff at the Iowa State University Northeast Research and Demonstration Farm are trying to rouse up more attention and input from regional producers. ISU Extension staff and Northeast Iowa Agricultural Experimental Association officers reminded members at a recent annual meeting about the importance of their input for upcoming seasonal activities at the research farm, which is also home to the Borlaug Learning Center outside of Nashua in Chickasaw County, Iowa. “We are the best-kept secret in northeast Iowa,” Tim Burrack, president of the NIAEA, said to about 50 members filling a classroom on the farm. “We need to remind people this research farm is here for them.” The farm will celebrate its 50th anniversary in 2026. The NIAEA owns the 260-acre research and demonstration farm. Iowa State and the association partnered to open the Borlaug Learning Center in 2009. The center includes Extension and research farm offices, rural development office space and meeting rooms.

Manitoba Government Providing $150 Million for Agricultural Producers

The Manitoba government will provide farmers and producers with more than $150 million in supports, including $10 million to match federal AgriStability funding, Premier Wab Kinew announced today. “We’re standing up for Westman and Western Canada, and protecting your jobs,” said Kinew. “With $150 million in supports for agriculture, we’re making sure that farmers and producers can weather the economic uncertainty we’re facing and protecting jobs in the agriculture industry.” The Manitoba government will provide $10 million in additional matching funds for the AgriStability program, as well as $140.8 million for business risk management programming including AgriInsurance, Wildlife Damage Compensation and AgriInvest. The premier noted the province is also working with farmers, producers and businesses to protect jobs, strengthen Manitoba’s economy and respond to tariffs from China and the United States, in addition to working with Keystone Agricultural Producers toward a number of sh

© 2025   Created by Darren Marsland.   Powered by

Badges  |  Report an Issue  |  Terms of Service