March 18, 2022
As Canadian rail strike looms, potash prices likely to continue to rise in U.S. as demand shifts ‘from rail to river’
By Ryan McGeeney
U of A System Division of Agriculture
Fast Facts:
- Canadian Pacific Railway may lock out 3,000 union workers as soon as Sunday
- Canada supplies about 86 percent of potash for U.S.
- Arkansas fertilizer retailers have most of what they need for 2022
- Rising demand from northern states will likely further impact price
(454 words)
LITTLE ROCK — If a Canadian Pacific Railway strike becomes a reality on Sunday, U.S. farmers north of Arkansas who normally rely on rail freight to deliver fertilizer may end up seeking inputs via river routes from the south — increasing demand on an already pricey necessity.
The railway said Wednesday that a “lockout order” would go into effect for about 3,000 employees by March 20 if the company cannot reach an agreement with the Teamsters Canada Rail Conference union before then.
The union announced its intent to strike during the first week of March. As the March 16 deadline approached, agronomists and agricultural economists noted that a stoppage of Canadian rail traffic could impact many North American growers, most of whom rely to some degree on the fertilizer potash.
Canada is the world’s No. 1 potash producer, supplying about a third of global supply, and about 86 percent of the potash purchased in the United States.
Scott Stiles, extension economist for the University of Arkansas System Division of Agriculture, said that while a kink in the Canadian potash supply line may not cripple the 2022 planting season, it only complicates an already troublesome outlook.
“This is certainly not good news,” Stiles said. He noted that 10 to 15 percent of Canadian Pacific’s business is transporting fertilizer. “They also move some U.S. grain to the export terminals in the Pacific Northwest.”
Western markets are already making do without potash imports from the world’s No. 2 and No. 3 potash producers — Russia and its neighbor and ally Belarus — due to Russia’s invasion of Ukraine. Over the past five weeks, potash prices have increased by 12 percent, resuming an upward trend that has been in place for much of the past year.
“Russian and Belarus potash supplies are essentially unavailable to the world export market,” Stiles said.
2022 outlook
Luckily for Arkansas growers, potash supplies for the 2022 growing season will likely
not be affected, although prices will likely rise as growers in northern states begin
to look southward.
Trent Roberts, assistant professor of crop, soil and environmental science for the Division of Agriculture, said most fertilizer retailers in the state have 50 to 100 percent of their seasonal potash supplies already on hand.
“Almost all potash in Arkansas is going to be supplied via the river and not rail, so this will not impact their supply,” Roberts said.
“The only way they see this impacting Arkansas is price,” he said, regarding fertilizer retailers he had spoken with this week. “As the rail strike continues, and as more people up north begin to shift to the river for their potash needs, that will impact the cost for the potash supplied via the river. The price would increase substantially.”
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About the Division of Agriculture
The University of Arkansas System Division of Agriculture’s mission is to strengthen agriculture, communities, and families by connecting trusted research to the adoption of best practices. Through the Agricultural Experiment Station and the Cooperative Extension Service, the Division of Agriculture conducts research and extension work within the nation’s historic land grant education system.
The Division of Agriculture is one of 20 entities within the University of Arkansas System. It has offices in all 75 counties in Arkansas and faculty on five system campuses.
The University of Arkansas System Division of Agriculture offers all its Extension and Research programs to all eligible persons without regard to race, color, sex, gender identity, sexual orientation, national origin, religion, age, disability, marital or veteran status, genetic information, or any other legally protected status, and is an Affirmative Action/Equal Opportunity Employer.
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Media contact:
Ryan McGeeney
Communications Services
University of Arkansas System Division of Agriculture
Cooperative Extension Service
(501) 671-2120
rmcgeeney@uada.edu