Fertilizer shortages may lead to lower grain output through delayed or suboptimal nitrogen application and encourage farmers to plant less fertilizer-intensive crops such as soybeans, the report noted.

In the U.S., where farmers import up to 50 per cent of urea fertilizer in some years, spring planting could face challenges as supplies remain around 25 per cent below typical levels, according to The Fertilizer Institute.

WHY IT MATTERS: Nitrogen fertilizer prices have risen around 40 per cent since the onset of the conflict in the Middle East, intensifying financial pressure on farmers

Nitrogen fertilizer, which accounts for roughly 20 per cent of grain production costs, has seen prices rise 40 per cent since the onset of the conflict, Goldman said. A quarter of global nitrogen trade and about 20 per cent of LNG shipments — key for nitrogen production — transit the Strait of Hormuz, which has been effectively blocked since the war in Iran started.

Supply disruptions could tighten availability and increase production costs elsewhere, the bank warned.

“Spare fertilizer production capacity outside the Middle East appears limited,” Goldman added, citing production constraints in Russia, which typically accounts for around 15 per cent of global nitrogen fertilizer exports due to facility attacks and export limits, as well as China’s likely extension of fertilizer export restrictions beyond August.

While U.S. farmers remain relatively insulated for now due to advanced procurement ahead of planting season, disruptions in Europe, Australia and the Southern Hemisphere could bolster demand for U.S. grain exports and raise U.S. grain prices, the bank said.

However, delays to March fertilizer shipments might affect April availability, compounded by the lack of U.S. strategic reserves or quick domestic production scalability.

The post Hormuz-driven fertilizer shortage could raise grain prices, Goldman Sachs says appeared first on Alberta Farmer Express.

“We’ll probably have another two years of this,” said Steve Nicholson, global strategist of grains and oilseeds with Rabobank.

Grain prices are unlikely to rally much due to a global glut of the major crops.

“We have monster supplies,” he told reporters attending the bank’s Fall Harvest Outlook webinar.

WHY IT MATTERS: Grain farmers need to know when their operations will be profitable again.

Nicholson said it is hard to come up with an outlook for the sector in an environment of trade spats, tariffs and shifting government policy.

“With all the things swirling around, I’m back to the fundamentals,” he said.

He looked at U.S. corn prices dating back to 1900 and discovered that every 25 to 35 years, prices bump up to a new plateau.

Nicholson believes the grain sector is in year 17 of the current plateau, where corn prices have a floor of US$3 per bushel and a ceiling of $7.

Current prices are closer to the bottom of that range than the top due to the large supplies.

He also noted that the price range in the current plateau is a whopping $4 per bu., when in previous plateaus it was $1 to $1.50. That means there is more price volatility.

Nicholson suspects it will be a supply-side shock that jolts the market out of the current doldrums rather than a demand-side shock.

There have been 18 year-over-year declines in global production of the four major crops (corn, soybeans, rice and wheat) since the 1960-61 crop year, most of which were caused by drought.

There have only been five times since 1960-61 where domestic consumption of the major crops has dropped and that was by a fraction of a percentage point.

“Any shortfall in production can move the market very quickly,” he said.

Nicholson pointed out that while global stocks are in the top 10 per cent of all time, the stocks-to-use ratio has been falling every year since 2018-19, a sign that the increase in stocks is not keeping up with the increase in demand.

He also noted that while the volume of stocks has increased, the amount of corn, wheat and rice in the hands of the major exporting countries is low.

“Free stocks are not highly available,” he said.

Soybeans are the exception to the rule, with exporters holding 56 per cent of the stocks.

Nicholson said North American farmers are at the bottom of the typical row crop cycle, where operating capital is drying up.

Farmers are drawing down their operating lines of credit by more than 50 per cent per year, compared to the usual 20 per cent.

They are cutting back on inputs and machinery purchases and attempting to renegotiate land rents.

However, Nicholson said there will probably be two more crop years of losses before farmers once again break even in 2027-28.

That is partially because input costs have been “stickier” than usual. They are coming down, but not fast enough.

U.S. farmers are not doing enough to cut back on inputs, partially because they will be receiving about $40 billion in government payments in 2025, which will be close to the largest subsidy program on record.

Owen Wagner, Rabobank’s grains and oilseeds analyst, thinks current market conditions favour U.S. farmers increasing soybean acres and decreasing corn plantings next year.

However, that could change if trade talks between the United States and China fizzle.

The post Grain farming’s hard times expected to continue appeared first on Alberta Farmer Express.

Canadian farmers are forecasted to spend $22.5 billion on crop inputs in 2026, wrote FCC senior economist Leigh Anderson in a Sept. 10 report.

“This could make 2026 one of the most expensive crop years, potentially rivaling the record set in 2022,” Anderson said.

Fertilizer prices elevated

Fertilizer costs are expected to reach nearly $10 billion.

“Fertilizer prices have been rising over the summer, even though this is usually a quiet time when prices tend to drop,” Anderson wrote.

High prices have suppressed summer demand among Canadian farmers — many of whom have delayed purchases.

However, U.S. farmers planted 7.4 per cent more corn than last year, which elevated demand for nitrogen and supported prices. Demand has also been strong in other parts of the world, including Europe.

Global phosphate supplies are tight and prices remain high.

Geopolitics like the war in Ukraine also continue to influence fertilizer supply. A peace deal could ease energy and fertilizer prices and help restart European nitrogen plants. Continued conflict would keep prices high.

Additionally, U.S. tariffs on Russia may increase nitrogen costs, particularly for Eastern Canada.

China has resumed limited exports of urea and phosphate after years of restriction, Anderson added. This could help ease global shortages.

Pressures on crop prices

Canadian farmers are facing the disruption of canola and pea exports to China. Crop price ratios currently favour Canadian farmers planting oilseeds over cereals due to strong biofuel demand. However, Anderson said future demand and acreage will depend on trade disputes with China.

China hasn’t bought any new crop soybeans from the U.S.

“If this continues, both soybean and canola prices could drop further,” Anderson wrote.

FCC’s analysis of fertilizer-to-crop price ratios shows a slight affordability decline for 2026 with potential for that decline to worsen, depending on the trajectory of fertilizer and crop prices.

In the midst of increased uncertainty, Anderson urged farmers to focus on what they can control.

“Leveraging agronomic expertise, economic decision tools, and collaborative relationships with suppliers can help producers realize efficiencies and sustain profitability,” he said.

The post Crop input costs to rise in 2026: FCC appeared first on Alberta Farmer Express.

“Since last January’s outlook, crop margins have improved, though for most producers they remain close to breakeven levels,” wrote FCC senior economist Justin Shepherd on Wednesday.

Stronger prices

Overall, cash prices have strengthened since January and, while not at 2022 peaks, exceed long-term historical ranges.

For canola producers, strong Canadian exports and positive news about U.S. biofuel incentives have improved demand expectations, Shepherd said.

In July, U.S. Department of Agriculture lowered its forecast for 2025/26 global wheat production and wheat ending stocks—based in part on lower expectations for Canada. Excluding China, global ending stocks are nearly at a 20-year low, wrote Shepherd.

Biofuel policy is driving higher soybean crushings in the U.S. with the expectation that industrial use in 2025/26 will exceed food consumption for the first time.

Corn production is forecasted to jump this year in part due to a large Brazilian crop, “but higher consumption is expected to lead to ending stocks roughly unchanged year over year,” Shepherd added.

The U.S. corn crop is forecasted at 410 million tonnes, up from last year’s 378 million tonnes, noted analyst Jerry Klassen. U.S. corn will displace some feed barley in Alberta and will take 20 to 30 cents off the cost-per-pound gain for beef cattle.

Average crop year?

Normalized Difference Vegetation Index (NDVI) readings of the three Prairie provinces indicate average levels, suggesting yield potential within or slightly above the normal range, said Shepherd. July saw more rain than the previous year, though he noted some areas are seeing drought conditions.

Cypress County in southeastern Alberta has declared an agricultural emergency for the fourth time in five years. However, as of the week ending July 15, crop conditions were improving in much of the province. Heavy rainfall in Saskatchewan also benefited some of the less mature crops.

This year Ontario and Quebec saw planting delays due to excess moisture, however heat and rainfall have supported corn and soybean crops to progress toward typical development stages, said Shepherd.

Revenue outlook improved

Farmers’ revenue outlook has improved compared to FCC’s January forecast.

“This improvement is primarily attributed to slightly stronger pricing, as cost structures have remained relatively stable and yield projections are average across the major provinces,” Shepherd wrote.

Margins are expected to be higher than last year, but they continue to fall below the five-year average. For many producers, particularly once land costs are factored in, returns are projected to be at or near breakeven.

“It should be noted that actual results may improve should yields – or marketing opportunities – exceed our model’s baseline assumptions,” he added.

The post Canadian crop outlook has improved since January says FCC appeared first on Alberta Farmer Express.

Shawn Madsen, operations manager for Southland Pulse Inc. located northwest of the city, said the precipitation came right before growers brought their planters out into the fields. He rated the soil conditions as “pretty good”.

“For seeding, (it was) probably perfect conditions,” Madsen added. “But we need the rain again. We’re getting to that point where it’s getting pretty dry and we’ll see if there’s something in the forecast.”

He also said seeding has progressed to the point where some local growers will be finished their seeding in a matter of days. However, the story is different in other areas.

“Probably 100 kilometres to the north … northwest, northeast, I would say that number significantly dips down to around 50 per cent and less,” Madsen added.

He expects there to be slightly more pulse acres seeded this year. Agriculture and Agri-Food Canada, in its April estimates, projected 3.516 million dry pea acres in Canada to be planted, compared to 3.212 million in 2024. However, AAFC also estimated small declines for lentil, chickpea and dry bean acres.

Pea markets have shown some price movement. Delivered bids for green peas in the Prairies ranged from C$14.50 to C$17 per bushel as of May 12, up 50 cents on the high end from the previous week, according to Prairie Ag Hotwire. Yellow peas were C$9.35 to C$10.25/bu., down 50 cents.

Despite this, activity has been quiet.

“(Market volatility has) gotten buyers kind of spooked to put something on paper. Farmers have just been busy planting and they are putting marketing on hold right now,” Madsen explained. “Farmers will probably take a look at what they have left and maybe start to market those last few bushels.”

On May 8, Statistics Canada reported that as of March 31, the country had 1.356 million tonnes of peas in stock, 947,000 on farm and 409,000 in commercial stocks. The figure is up from 955,000 tonnes in total (726,000 on farm and 229,000 commercial) in 2024.

The post Pulse Weekly: Saskatchewan pea plantings progress appeared first on Alberta Farmer Express.

“Absent tariffs, profitability was already looking tight for the 2025-26 crop year,” wrote FCC senior economists Justin Shepherd and Graeme Crosbie.

“Considering the impact of tariffs (or potential tariffs) makes that outlook even more challenging.”

Western wheat and canola

FCC’s latest profitability estimates for Western Canadian wheat and canola showed average returns of $50 to $75 per acre, excluding the cost of land, and assuming average regional yields.

Shepherd and Crosbie noted the difficulty of predicting prices in the current trade environment and said there’s considerable downside risk to those estimates.

If prices saw a 15 per cent decline, it would result in a loss of $25 per acre on canola, and breakeven returns on wheat.

Canola futures had made gains from the start of the year before China announced it would impose 100 per cent tariffs on Canadian canola oil and meal. Nearby futures fell by more than 10 per cent compared to Jan. 1, FCC data showed.

In the past three weeks, canola futures have rebounded near to where they were to start the year.

Nearby wheat futures had gained nine per cent by mid-February compared to Jan. 1, but slid to hover around where they started.

Eastern soybeans and corn

FCC’s latest profitability estimates for soybeans and corn in Eastern Canada are around $375 per acre. This excludes the cost of land and assumes average regional yields.

If prices fell by 15 per cent, returns would fall to $240 per acre for corn and $280 per acre for soy.

Soybean and corn futures experienced similar trajectories to canola and wheat — rising in late January and February before dropping off in March. During that period, the emerging forecast for a large South American soybean crop pressured prices.

Will farmers change course?

Eastern farmers have historically stuck to their soybean, corn and winter wheat rotations, wrote Shepherd and Crosbie.

Statistics Canada estimated Ontario and Quebec farmers would plant 3.9 million acres of soybeans and 3.1 million acres of corn.

American farmers are expected to plant nearly five million more corn acres than last year, as global stocks-to-use are tighter relative to soybeans, Shepherd and Crosbie said.

Likewise, Western Canadian canola and wheat acres tend not to deviate much year to year — even between 2019 and 2022 when China restricted imports of Canadian canola seed.

Statistics Canada predicts 21.5 million acres of canola to be seeded in 2025 along with 19.1 million acres of spring wheat.

“We could see some ‘swing acres’ go into flax and lentils this year,” Shepherd and Crosbie wrote. “Our profitability estimates for 2024-25 and 2025-26 show these two crops as having decent returns.”

These crops have also historically seen more variation.

Manitoba could also see more soybean acres. These have tended to vary year-to-year, and potato acres may decline as potato buyers have been reportedly scaling back contracts.

Shepherd and Crosbie said that now, more than ever, it’s important to understand individual farm production costs.

“There will be volatility and, at times, opportunities to lock in returns. This is maybe truer in 2025-26 than in other years given prices are reflecting more geopolitical policy and less supply/demand fundamentals, and these policies can be implemented (or reversed) with the stroke of a pen.”

The post Trade instability likely to tighten 2025 crop profit margins says FCC appeared first on Alberta Farmer Express.

Haley said feed barley went for C$300 to C$305 per tonne for January-February-March during the week of Nov. 25, while that for April-May-June was at C$305 to C$310.

“Corn is virtually the same price. It just depends on the day,” he added.

“What’s helping barley’s cause is the price of corn. You need more corn DDGS for more protein in the ration in order to get the same bang for barley,” Haley continued.

He said when feeding corn, the DDGS must be 20 to 25 per cent, but only five to 10 per cent when feeding barley due to its higher protein content.

But with the market virtually covered for the balance of December, there won’t be much movement of prices or additional product.

“There’s going to be some demand starting in the last half of January. We’ll see who cracks first. Is the seller going to want to move some grain before then or is the buyer going to need it?” Haley posed.

When it comes to wheat, he said Ag Value has been moving only small amounts of soft wheat as there’s very little demand for hard red spring wheat.

Haley noted the line elevator companies have covered their domestic sales and exports. About the only factor that can cause prices to shift he said is the incoming Trump administration due to “a lot of unknowns.”

However, Haley suggested corn prices on the prairies will become cheaper than barley in about five to six months.

The post Feed Grain Weekly: Barley, corn the same price appeared first on Alberta Farmer Express.

Evan Peterson of JGL Commodities in Moose Jaw, Sask. said barley and corn were priced at C$300 per tonne, feedlots preferred barley for feeding livestock.

“It’s getting closer (for corn), but with the weakening Canadian dollar, those corn imports are actually higher in price,” he said. “We saw that spread of corn over barley at about C$15 to C$20/tonne and now it’s at about C$5 or so.”

While corn prices aren’t competitive right now, Peterson added, they may be in a little while.

“Right now, corn hasn’t made a big move, but I feel like it’s kind of on the verge and getting closer.”

The colder winter weather can cause problems for trucks carrying grains going to feedlots, Peterson said. However, more cattle are entering feedlots as well.

“With these cattle moving a little later into feedlots, we’re now starting to see demand kind of pick up versus where we were a month ago. We were waiting for it, but now it’s finally here,” he added.

Peterson predicted feed barley to have between C$5 to C$10/tonne of room to the upside, with corn prices staying put for the rest of 2024.

“I think we’re going to need some corn to take some pressure off of the barley, especially into the spring, or else stocks will get depleted quicker than we think and we will see barley become quite expensive in the spring,” he said.

Prairie Ag Hotwire reported delivered bids for feed barley in Saskatchewan ranging from C$4.50 to C$4.75 per bushel as of Nov. 26, steady from the previous week. In Manitoba, prices were from C$4 to C$4.54/bu., up four cents from last week. In Alberta, there was a wide disparity from C$4.35 to C$6.42/bu., up 11 cents.

For feed wheat, Saskatchewan’s delivered bids were from C$6 to C$7.38/bu. and unchanged from last week. In Manitoba, the only price reported was C$6.80/bu., up 18 cents. Alberta delivered prices ranged from C$6.26 to C$8.44/bu., steady from last week.

The post Feed Grain Weekly: Corn prices drop, barley favoured appeared first on Alberta Farmer Express.

Jordan Fehr of Simpson Seeds Inc. in Moose Jaw, Sask. called India’s trade policies “open-close”, where import quotas are set and certain markets would be closed for months afterwards, adding that they haven’t been predictable in nearly a decade.

“But (India) has been very unstable even when they are in for a product. Our market was already on edge about India and I don’t think that really changes much because no one really know whether or not (India) will come to the table or not,” Fehr said.

“In the end, when people need to eat, they have to eat. If they can’t find pigeon peas, then they’ll find green lentils to replace them and those are going to come from either Canada or Russia.”

Fehr added that Russia’s green lentil production may not be enough to satisfy India’s demand, still leaving Canada as a potential trading partner.

As of Oct. 11, lentil prices have increased by 1.5 to three Canadian cents per pound over the past week, and three to 12 cents over the past month, according to Prairie Ag Hotwire. However, they won’t be as high as those from one year earlier.

Mid-summer heat damaged some lentil crops and reduced production and quality, resulting in most lentils being rated at #2 grade. However, Fehr attributed the current price increases to farmers holding onto their crop rather than selling.

“Even though our crop is probably 30 per cent more than last year, the pipeline was empty going into harvest. So almost all buyers across the globe needed to buy something just to catch up where they usually are and then they needed to buy their new crop needs,” Fehr said.

“With increased demand and early shipments to India, I wouldn’t be surprised if our green lentil tank is empty come May or June this year.”

Canada exported 1.68 million tonnes of lentils in 2023/24, with India the largest destination accounting for 33 per cent of the total, according to Statistics Canada data.

The post Pulse weekly: Lentil market watching India dispute appeared first on Alberta Farmer Express.

The average price for all wheat except durum was at C$305.21 per tonne in Manitoba in July, compared to C$394.91 one year earlier. In Saskatchewan, the average price was at C$301.41 versus C$392.96 in July 2023. In Alberta, the average price last July was C$312.54, lower than the C$405.51 one year earlier. Average durum wheat prices also went down from C$416.94 in July 2023 to C$353.83 last July in Saskatchewan, and from C$421.88 to C$348.45 in Alberta.

The average July canola prices in Manitoba dropped to C$623.51/tonne in Manitoba last July from C$764.45 in 2023. In Saskatchewan, the price was at C$646.97 compared to C$781.78 one year earlier, and in Alberta, canola fell to C$644.59 from C$772.94 in July 2023.

Barley prices on the Prairies also fell with the average July price in Manitoba dropping from C$367.32/tonne to C$273.17. In Saskatchewan, the average price pulled back from C$358.58 to C$248.14, and in Alberta, barley was priced at C$397.43 versus C$285.25.

However, the average July prices for oats across the Prairies were up slightly. In Manitoba, they rose from C$295.48/tonne to C$306.54, and in Saskatchewan, the average price went from C$259.29 to C$304.66. Those in Alberta went from C$277.31 to C$307.27.

Average July dry pea prices also went up from C$367.73/tonne to $424.08 in Manitoba, from C$398.78 to C$430.53 in Saskatchewan, and from C$415.09 to C$422.08 in Alberta.

The average July lentil price went down in Saskatchewan from C$824.10/tonne to C$809.86, while in Alberta, it went up from C$707.11 to C$769.88.

Average prices for cattle for slaughter increased from July to July. In Manitoba, they rose from C$203.58 per hundredweight to C$232.98. In Saskatchewan, the price went from C$194.12 to C$223.55. In Alberta, they went from C$227.58 to C$249.41. For feeder cattle, the average July price in Manitoba increased from C$284.85/cwt. to C$326.34, and in Saskatchewan, the price went up from C$288.67 to C$321.94. For Alberta, the price changed from C$239.60 to C$262.13.

The post Most Prairie farm product prices drop: StatCan appeared first on Alberta Farmer Express.