Fertilizer Market Report – August 30, 2023
Who are Canada’s farmers? New federal data provides a snapshot
The makeup of Canada’s farmers and how they operate appears to be showing some changes, according to federal data. In a report, Statistics Canada said Friday that farm households are becoming more diverse and smaller, and more farm operators are living in urban areas. It’s also becoming more common for farmers to diversify their income, as farming industries face significant challenges ranging from drought, fires and climate change to evolving consumer tastes, worker shortages and global price pressures.
Canada’s farmers are still mostly made up of older people and men, the report said. It defined “farm population” as farm operators — those who manage the farms — and their households.
In 2021, over half the farm population were men, at 52.5%, while just under half of Canada’s population are men (49.4%). Meanwhile, in 2021, more than four in 10 male farmers were 55 years old and older, compared with 31.2% of the total population who were in that age bracket. Similarly, 41% of women farmers were in the same age category, compared to 33.5% of Canadians.
Immigrants also make up a portion of Canada’s farmers in 2021, sitting at 6.9%, up from 6.8% in 2001. However, immigrants make up a much smaller proportion of the farm operator population than the general population.
Immigrants made up 23.1% of Canada’s population in 2021, up from 18.7% in 2001.
Meanwhile, less than 4% of the farm population in 2021 — 3.7% — were part of a racialized group, while the demographic made up 26.6% of the general population.
Among those in the farm population who identified as from a racialized group, 53% were South Asian, followed by Chinese at 15.8%, Black at 5.9% and Latin American at 5.9%.
The report also notes that there are fewer farmers than in the past as farms have become automated and sophisticated in their operations.
In 1971, one in 14 Canadians was part of the farm population, but in 2021, that number decreased to one in 61 Canadians, a decline of 62.2%.
The average size of a farm household also dropped to 2.8 people in 2021 compared to 4.3 people in 1971, in line with general population trends.
Finally, more of the farm population is living in urban areas, with 24.5% doing so in 2021, up from 16.1% in 2016 and 7.5% in 1971.
The greatest proportion of the farm population living in urban areas was reported in Newfoundland at 42.2%, followed by B.C. at 37.8% and Alberta at 28.3%.
Farms for dairy cattle, field crops and livestock grazing were still overwhelmingly located in rural areas, while just over 40% of those with fruit, tree nut, vegetable and melon farms lived in urban areas.
August Average Prices Closer to Long-Run August Average Price, But Still Not There
In Western Canada, average August Urea DEL prices jumped to C$720/mt in August from July’s average price of C$582/mt. It was higher than the 10-year historical average August price of C$527/mt.
At NOLA, average August urea prices rose to US$373/st from July’s average price of US$341/st. It was higher than the 10-year historical average August price of US$310/st.
In Western Canada, average August MAP DEL prices increased to C$935/mt from July’s average price of C$837/mt. It was higher than the 10-year historical average August price of C$747/mt. We are seeing tight supply of phosphate throughout North America.
At NOLA, average August MAP prices increased to US$619/st in August from July’s average price of US$488/st. It was higher than the 10-year historical average August price of US$447/st.
North America Urea Last Week – Western Canada and NOLA Diverge
Last week, urea prices in Western Canada were reported at C$695-C$720/mt FOB and C$680-C$760/mt DEL in mid-August, all flat week over week.
Urea was quoted at C$705-C$770/mt FOB for the latest offers in Eastern Canada.
Last week, NOLA urea remained under pressure, with the market falling to US$335-US$360/st FOB, depending on the time of shipment, down from last week’s US$350-US$370/st FOB range. The high was confirmed for August tons, with September trades ranging from US$335-US$350/st FOB during the week. October-November business fell in the US$330-US$342/st FOB range.
Last week, urea dropped to US$410-US$430/st FOB St. Paul, Minn., with delivered tons remaining in a broad range at US$485-US$525/st in the Northern Plains.
Fueled by softening NOLA barge values, urea pricing in the Eastern Cornbelt fell to US$415-US$430/st FOB last week, down from the previous week’s US$430-US$460/st FOB, with the low confirmed at Cincinnati, Ohio.
In the Western Cornbelt, urea prices slipped to US$410-US$430/st FOB last week, down from the previous week’s high of US$450/st FOB, with the lower end of the range confirmed at St. Louis, Mo.
North America Phosphate Last Week – Market Largely at a Standstill Last Week
The latest MAP DEL prices in Western Canada were pegged in a range of C$960-C$990, flat week over week.
MAP remained at C$880-C$925/mt FOB in Eastern Canada, with DAP reported at the C$825/mt level FOB Montreal.
Sources described the NOLA phosphate market as mostly at a standstill during the week, though DAP prices softened US$5/st from the week-ago high. Offers were reported in the US$530-US$540/st FOB range, while buyers hoping to pick up tons in the US$520s/st FOB were said to find no takers.
MAP prices lifted to US$630-US$640/st FOB from last week’s US$625-US$640/st FOB, with players noting limited trading volumes.
Phosphate prices continued to climb in the Northern Plains. The latest levels FOB St. Paul were reported at US$590/st FOB for DAP and US$685/st FOB for MAP, up from the prior week’s US$570-US$580/st FOB range for DAP.
DAP prices rose to US$585-US$595/st FOB in the Eastern Cornbelt, up from last week’s US$570-US$590/st FOB range. MAP firmed to US$685-US$700/st FOB in the region, with the low confirmed at Cincinnati.
DAP prices in the Western Cornbelt moved to US$580-US$590/st FOB during the week, with the low confirmed at St. Louis. MAP remained at US$675-US$700/st FOB in the region, with the low at St. Louis and the high reported in the Iowa market.
Green Markets Global Macro Comments – Still Waiting on Vessel Lineup for Indian Tender
India
Urea tender award winners moved quickly to line up vessels to supply product from the Indian Potash Ltd. (IPL) tender. Sources said 12 ships had been booked so far, accounting for about 600,000 mt.
Eight of the vessels will load about 400,000 mt from China, while another three ships will bring in about 150,000 mt from the Baltic. One Arab Gulf cargo has been booked so far.
Middle East
Producers are focused on fulfilling orders related to the IPL tender. At the same time, buyers are not pushing for any spot business, knowing producers will try to push the price higher based on the large orders they must fill for India.
While the lack of spot deals was expected, sources noted that contract renewal talks are moving more slowly than in previous years. Producers seem to be in no hurry to conclude new contracts.
Brazil
Landed urea prices at Brazil softened to US$370-US$375/mt CFR from last week’s US$380-US$400/mt CFR, a roughly 4.5% decline. Sources noted a relatively inactive market, causing prices to drift lower. With plenty of offers reported in the market, however, buyers could wait a few weeks before stepping forward to make purchases.
China
Speculation in the domestic market raised prices so quickly that paper trading was temporarily halted, players said. Based on the domestic market, sources estimated the export price at US$385/mt FOB, up US$5-US$10/mt from the last business, although no deals have been done at that level.
The main export activity is now centred on arranging export inspections for tonnage located at portside warehouses and factories. At the same time, traders are working to time the arrival of vessels to match their material’s anticipated export approval.
Eight vessels, totalling about 400,000 mt, have so far been nominated to pick up material from Chinese ports for the IPL tender, sources said, while about 800,000 mt is currently sitting in portside warehouses. Most of those tons are still awaiting export clearance from customs officials, however.
Industry Tidbits
- Russia is considering setting up a unified trading company to export fertilizers in a bid to increase its pricing influence on global markets, Yahoo News reported.
- A University of Manitoba researcher is targeting the ability of volunteer canola seed to stay dormant in the soil after harvest, according to a report in Western Producer.
- As the northern hemisphere’s crops pour into bins and terminals, they’re heading into a global grain market and general economic conditions that create a murky picture for the next few months, another report in Western Producer noted.
