Farms grapples with supply chain

THUNDER BAY, ONT. — A short-lived rail work stoppage early this week sent an added wave of concern through the business sector about supply chain issues that would have been felt from the gas tank to the bread that is served at the table.

With challenges caused by the pandemic, many businesses are struggling with both worker and supply shortages across the region.

The agricultural sector is also grappling with supply chain issues and with the growing season fast approaching, farmers need to ensure materials such as seed, fertilizer and equipment are ready and on hand.

Darren Fisk, general manager of Thunder Bay Co-Op Farm Supplies, said with a little foresight, they “timed the market” and pre-contracted almost all of their fertilizer last fall.

“With our business cycle we kind of try to stay out in front of things,” Fisk said. “We suspected that the prices were going to escalate greatly over the winter, so we bought it all last fall.”

With the purchase made, Fisk has been receiving deliveries from August 2021 to January 2022. He says they were lucky to have purchased it last fall because the price has escalated up.

“We have most of it in place already. We’re pretty much set for the year this year,” he said, adding that he has almost 1,800 tonnes of phosphorus fertilizer stored on site with another 17 truckloads that will arrive from the U.S. Twin Cities. Most of their seed stock has arrived via truck as well.

Fisk also jumped at an opportunity for funding through the Northern Ontario Heritage Fund and the Ministry of Northern Development, Mines, Natural Resources and Forestry for the expansion of their fertilizer plant that doubled their capacity.

Fisk says they identified supply chain issues before COVID-19 hit, and decided to “look at doing this.”

“We used to get some fall delivery and then some spring delivery, which would have handicapped us in a year like this year,” he said.

“This is the first year we could fully load up to avoid supply chain disruptions.”

The expansion was completed in January 2021, with enough time for Fisk to receive his pre-ordered fall shipments.

Like Thunder Bay Co-Op, Timo Brielmann, owner of Brielmann Agriculture and Pinewood Crop Services Ltd. in Rainy River, has also pre-ordered fertilizer, seed and other growing stock.

“If they just don’t have it, they can’t give you anything. There’s no other option — it’s even with parts and stuff too,” he said.

“I ordered (equipment) parts in early November last year, and they said I won’t get it till June, but I need that before proceeding or I will have to just use the old part.”

Brielmann says all of their stock arrives via 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 chemistry, it’s getting to be tight,” he said. “It’s sad and it’s scary. So you’re going to have to be creative this year, that’s for sure.”

Brielmann described being “creative” could mean implementing different forms of weed control or just dealing with some “weedy fields.”

He says many farmers in the district might not put any fertilizer down or they may put very little down and some haven’t even pre-bought anything.

“There’s going to be some poor crops or there’s going to be some funny looking crops — and then there’s the risk that the wheat doesn’t make a grade or doesn’t become a number one,” Brielmann said.

He added that just because you’ve pre-ordered stock, it doesn’t mean you’re safe because the supply is simply not available. Although they store a lot of stock on their farm, they don’t have all that is needed for the entire season and receive continuous shipments.

“We have purchased 90 per cent of our fertilizer seed and chemistry but we don’t have all those products on the farm yet,” Brielmann said.

“It’s impossible to hold it all (at once) because that would be a huge upfront cost.”

When people complain that grain prices are so high, Brielmann says it’s because his costs have escalated and he is simply keeping up by spending 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’re getting nervous, we feel the ramifications here. Fertilizer prices have nearly tripled. Just because the crop input prices are up, doesn’t mean that the input business makes more money.”

Then there are the rising trucking costs with the high cost of fuel that is adding to the problem. He says when trucking costs are going“through the roof,” especially with fuel prices, they’ve had to adjust all of their costs.