(Ottawa) — National Farmers Union President Katie Ward reiterated the organization’s call for an investigation into fertilizer pricing in her February 17 presentation to the House of Commons Agriculture Committee’s study on supply chain issues. She said “Fertilizer companies charging exorbitant prices blame supply chain issues, yet these same companies are making huge windfall profits. The NFU has asked this Committee to investigate all the factors behind fertilizer prices, and we hope you will announce such a study very soon.”
The recent publication of 4th quarter and year end results show that fertilizer company margins, profits, and earnings are extraordinary. The companies themselves highlight huge net returns. Nutrien, Canada’s largest fertilizer producer, notes “record financial results” and reports fourth quarter net earnings nearly four times higher than a year ago. CF Industries, the second largest producer, reports fourth quarter net earnings nearly eight times higher than a year ago. Yara International, also with significant Canadian production capacity, reports that for its operations in the Americas, “EBITDA [Earnings before interest, taxes, depreciation and amortization] excluding special items was 160% higher than a year earlier, as increased nitrogen prices more than offset higher energy costs...” [emphasis added]. In many cases, the companies posted these higher net returns on lower production and sales volumes.
“The unparalleled profitability that Canadian fertilizer suppliers are realizing at the moment is disturbing by any measure of comparison,” continued Don Ciparis, President of National Farmers Union—Ontario. “Canadian farmers are trying to cope with huge levels of farm debt while interest rates start to go up, and yet fertilizer companies are able to profiteer because there is next to no competition within this supply chain. It is all too easy for companies to re-name their profiteering as “inflation”, but it is precisely this kind of profiteering that fuels inflation.”
“Everybody experiences supply chain problems from time to time. But when farmers encounter supply chain problems, either upstream or downstream, our profits go down—not up. The lack of competition within the fertilizer supply sector means that these companies can charge whatever they choose with no fear of being undercut by the competition. Profiteering is the result, and Canadian taxpayers — through the risk management programs — are shouldering part of the burden” said Doug Scott, NFU Board member from Alberta.
The NFU has renewed its request to the Ag Committee first made in this letter
**Translation supported by Canadian Heritage