A short-lived rail strike earlier this week sparked further concern in the business sector over supply chain issues that would have been felt from the gas tank to the bread served at the table.
With the challenges caused by the pandemic, many businesses are struggling with labor and supply shortages in the region.
The agricultural sector is also grappling with supply chain issues and with the growing season fast approaching, farmers need to ensure that materials such as seeds, fertilizers and equipment are ready. and within easy reach.
Darren Fisk, general manager of Thunder Bay Co-Op Farm Supplies, said with some foresight that they “timed the market” and pre-contracted nearly all of their fertilizer last fall.
“With our economic cycle, we kind of try to stay out of things,” Fisk said. “We suspected prices would rise significantly over the winter, so we bought everything last fall.”
With the purchase made, Fisk received shipments from August 2021 to January 2022. He says they were lucky to have bought it last fall because the price went up.
“We already have most of them in place. We’re pretty much ready for the year this year,” he said, adding that he has nearly 1,800 tons of phosphorus fertilizer stored on site along with 17 other trucks that will be arriving from the US Twin Cities. Most of their seed stock also arrived by truck.
Fisk also jumped on a funding opportunity through the Northern Ontario Heritage Fund and the Ministry of Northern Development, Mines, Natural Resources and Forestry for their fertilizer plant expansion. which doubled their capacity.
Fisk says they identified supply chain issues before COVID-19 hit and decided to “look at it.”
“We used to get fall deliveries and then spring deliveries, which would have handicapped us in a year like this,” he said.
“This is the first year that we could fully load to avoid supply chain disruptions.”
The expansion was completed in January 2021, with enough time for Fisk to receive its pre-ordered fall shipments.
Like Thunder Bay Co-Op, Timo Brielmann, owner of Brielmann Agriculture and Pinewood Crop Services Ltd. in Rainy River, also pre-ordered fertilizer, seeds and other plants.
“If they just don’t have it, they can’t give you anything. There’s no other option – it’s even with coins and stuff too,” he said.
“I ordered parts (of equipment) at the beginning of November last year, and they said I wouldn’t receive them until June, but I need them before continuing, otherwise I will just have to use the old room.”
Brielmann says all of their stock comes in by truck and “if there’s nothing to pick up, there’s nothing to pick up.”
“So when it comes to fertilizer, or even crop inputs like chemicals, it’s starting to get tight,” he said. “It’s sad and it’s scary. So we’re going to have to be creative this year, that’s for sure.
Brielmann described that being “creative” could mean implementing different forms of weed control or simply treating certain “fields of weeds”.
He says many farmers in the district might not apply fertilizer or very little and some have not even bought anything in advance.
“There’s going to be bad crops or there’s going to be weird crops – and then there’s the risk of wheat not being ranked or becoming number one,” Brielmann said.
He added that just because you’ve pre-ordered stock doesn’t mean you’re safe because supply just isn’t available. Although they stock a lot of stock on their farm, they don’t have everything they need for the whole season and receive continuous shipments.
“We’ve purchased 90% of our fertilizer seeds and chemicals, but we don’t have all of those products on the farm yet,” Brielmann said.
“It is impossible to keep everything (at the same time) because it would represent a huge initial cost.”
When people complain that grain prices are so high, Brielmann says it’s because his costs have gone up and he’s just continuing to spend more money to make the same margin.
“The whole supply chain is collapsing, and that’s the biggest problem for everyone,” he said. “When big countries like China stop exporting fertilizer because they get nervous, we feel the ramifications here. Fertilizer prices have almost tripled. Just because farm input prices are up doesn’t mean the input trade is making more money.
Then there are rising trucking costs and high fuel costs that compound the problem. He says when trucking costs skyrocket, especially with fuel prices, they have to adjust all of their costs.