Producers in southwestern Manitoba and southeastern Saskatchewan have seen record amounts of rainfall this spring, causing record amounts of acres to go unseeded — and large amounts of fertilizer to go unused.
Many producers who bought fertilizer were unable to use it because it was just too wet to get on the field — and now many fertilizer plants are charging farmers to keep it in their storage facilities.
“Farmers are being charged storage costs for anhydrous ammonia that didn’t get delivered. They are getting charged by the month,” said Doug Chorney, president of Manitoba farm group Keystone Agricultural Producers. Farmers are not happy about being charged, he added.
“Nobody is happy. They have already paid for this product. They feel they are being victimized,” Chorney said. “It would be different if farmers had some revenue to offset these added costs, but when you have no crop seeded, it’s a bad time to be looking for money from producers.”
Arlynn Kurtz, vice-president of the Association of Saskatchewan Agricultural Producers, said producers who couldn’t use all of their fertilizer are also paying the price.
“Anything that you’ve taken delivery on and if it’s a deferred financing contract, you pay monthly interest on that,” Kurtz said.
One person in the fertilizer industry, who asked to remain anonymous, confirmed producers were being charged, with the cost ranging from $10 to $20 per ton per month. The source said the charge was being driven from the fertilizer manufacturers.
He added he was not surprised producers were being charged to keep product in the dealer’s storage facilities.
Chorney said some producers who have liquid or dry fertilizer and have the room have been storing it at their yards.
“Some farmers might plan to put in winter wheat in August or September, and use some of it then,” he said.
Chorney admitted that there is some cost for companies when storing the fertilizer, but said this was a bad time to be billing producers.
“There is a carrying cost for carrying it, and we don’t want to see our carriers go broke because they have to store it, but we sure would like to see the companies give a bit of latitude to producers when they are down and out,” he said.