A sharp jump in fuel and fertilizer prices has Canada’s agriculture producers engaged in a pricey game of chance.
Prices for diesel and fertilizer have nearly doubled since the war involving the U.S, Iran and Israel, as the stalemate has choked vital oil and gas shipments through the Strait of Hormuz.
That’s impacting commodities down the line, and a shortage of fertilizer could make this upcoming crop year a gamble for farmers.
The families of Bruce Bird and Dave Reid have had farms in Cremona, northwest of Calgary, for more than a century.
Both men threw the dice last fall and pre-purchased both fuel and fertilizer to get them through this growing season, with seeding about two weeks away.
“We’ve tied up hundreds of thousands of dollars,” said Bird, 48, who farms about 1,300 hectares.
“Had I not been able to justify the cost involved, I would have been a minimum of $100,000 further behind for exactly the same product, the same rates, the same everything.”
Bird said even with the savings win, the cost is still high.
“Our preplanning comes at such a cost. I don’t need to go Vegas. I live in Vegas,” he said.
“As my grandfather said, ‘You have to have deep pockets to play the game.’ So you’re sitting at the table losing money, then you throw another chip on the table and say, ‘Let’s go’ because you believe.”
Reid, 49, is planting about 1,012 hectares this year.
“Pre-buying in the fall was a gamble because, people were suggesting prices were going to be going down in the spring,” Reid said.
He said the price of diesel is about $1.50 a litre, because agricultural producers are exempt from paying excise taxes.
But Reid said the costs are still daunting.
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