Food prices could continue to soar due to fertilizer shortage, says expert

Farmers across Canada and the world are running into a shortage of fertilizer, and according to Evan Fraser, this will disrupt the global food supply and mean higher prices for consumers.

"We face a cascading series of problems that are rippling out of the Ukraine, exacerbated by climate change and the supply chain challenges associated with the pandemic," Fraser told host Matt Galloway on The Current. Fraser is the director of the Arrel Food Institute and a professor of Geography at the University of Guelph.

"This will crush farming in many regions of the world, especially in places like Africa."

Fertilizer is one of a farmer's main costs, and prices have reached an all-time high. That's putting more pressure on farmers to either pay big bucks or find alternatives, said Fraser. 

Sanctions, war in Ukraine, and supply chain disruptions are all factors for the high prices, and with Russia being the world's biggest fertilizer exporter, that has a big impact, according to Fraser he said.

The Food and Agriculture Organization of the United Nations' Food Price Index showed that March was an all-time high for food prices, and those prices had been rising aggressively for the few months before that. 

And with fertilizer costs being at a record high for farmers, Fraser says that means the price of food could get even higher. 

"It remains to be seen if March ends up being the all-time high, or if prices pick up again," said Fraser. 

"I think it will probably depend on the extent to which Canada and the U.S. get good harvests this year. If there is a draught in North America this summer, and Ukraine continues to be at war, then my by best guess is prices will start to rise again."

Given that Ukraine and Russia are two of the top wheat exporters globally, that commodity will see a price jump, said Fraser. Ukraine is also a producer of sunflower oil, which is a common source of fat in processed foods. 

While those cost increases may be manageable for someone who is well off, people who were already struggling to put food on the table are going to feel the impact most.

"Around the world, especially a poor consumer, someone who's struggling to make ends meet, whether they're in downtown Toronto or whether they're in Africa, this is an unbelievably challenging time," said Fraser. 

Innovation

Robert Misko has been a farmer for 35 years, and is the chair of the Manitoba Crop Alliance. He says fertilizer is a key ingredient for having a strong crop, and not having it can mean smaller yields and higher costs.  

"If you short yourself on that one, your yield prospects are down right off the bat, never mind contending with Mother Nature and what the weather has got to throw at it and what the growing season is going to be like," said Misko. 

"It's a concern for farmers, just as any other consumer. We have to buy most of our food at the grocery stores, too. So I mean, the costs keep going up and … it's getting harder and harder." 

Misko said with the margins getting tighter, it's putting the squeeze on farmers across the country to make enough money to keep producing.

But Evan Fraser said there are some positives, too. With Ukraine and Russia unable to export as much wheat, the Canadian prairies can take a bigger role on the global stage.

"The Canadian prairies can help fill some of that gap and take some of the pressure off. But we're very vulnerable to what Mother Nature throws at us this summer," said Fraser. 

"I think looking forward, we have … a historic opportunity to become the world's trusted supplier of safe and sustainable food. We've got the land; we've got the resources."

And, he said he hopes necessity will continue to be the mother of invention, as farmers try to figure out substitutes for the fertilizer they use. He said potential innovations could include slow-release fertilizer, more environmentally-friendly fertilizer, and smart tractors that spread fertilizer more efficiently. 

"Maybe some of this innovation and technological breakthroughs … will be unlocked by these high prices," said Fraser.  "In the three- to five- to seven-year horizon, there's some silver linings here. But… this is going to be a really tough year."

Written by Philip Drost. Produced by Enza Uda and Alison Masemann.