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The Brussels Post, 1974-04-03, Page 199' -t 40 • -,..r,',7."'"`• • Canadian raw materials can end fertilizer shortages - Agriculture minister says Agriculture Minister Eugene Whelan speaking recently at a Fertilizer Conference in Toronto discussed the outlook for the Canadian fertilizer industry. Agriculture in North American has been running with a governor on, its engine for as long as any living farmer can remember. The only exception was during the Second World War, and even then agriculture was limited by the shortage of inputs. That situation has changed dramatically during the past two years.. Demand has increased, and the world has more money to pay North American farmers to turn the production engine up. Canadian farmers are responding to that increased demand, .and are planting more acres than, ever before, and using more and better inputs, including fertilizer. Last year, farmers in western Canada increased fertilizer consumption by 36.5 per cent. This year they will increase consumption by another 25 per cent. There is no doubt that the demand will be strong for all of the grain they can produce this year, and the only real limits on sales will be the amount we can produce, and the amount we can transport and deliver. Unless the entire world, increases production this year, and by substantial amounts, demand and prices for Canadian crops will continue strong, not only this year, but the year after that. And there are many factors which could tip the scales towards an even stronger demand, including a crop disaster in any major producing area of the world. • Over the longer term, as the world begins to bump up against the limits of food production to feed, a population increasing by 75 million people a year, our markets will change. Crops will become relatively more important. Some forms of livestock such as hogs and chickens, which compete with humans for grains, will become more of a luxury item, and will be priced accordingly.. We are already experiencing more intensively. And that, in turn, will increase the demand for fertilizer. We have never tried to produce as much food as possible from our land in Canada, mainly because food prices weren't high enough to justify the added expense. But we can get some idea of our potential when we notice that European farmers use an average of three times as much fertilizer per acre as Ontario farmers. Average fertilizer use 'across the Prairies has ranged from 20 to 40 pounds per acre — nowhere near our full potential if we are shooting for maximum yields. Now, let's stop for a moment and summarize the outlook. World demand is increasing at a rapid rate. Demand and prices for most crops will almost certainly remain strong for at least two years. The countries where demand is growing the fastest are the countries that are already straining against physical production limits. Long-term increases in food production will probably come from areas such as Canada, where we have seldom enjoyed a demand and prices that would enable our farmers to afford the input cost of shooting for maximum yields. The key question now is whether Canada has the inputs to shoot for maximum production, provided demand and prices justify the farmers' investment in extra inputs. and the answer is clearly "yes, we do". We have a plentiful supply of land and water. We have skilled farmers, and modern technology for producing, processing and marketing food. .And we have an abundant supply of energy and most raw materials. Now, let's take a look at the fertilizer industry in particular. Perhaps we should begin with the early 1960s, when the North American fertilizer industry invested in a major expansion of production facilities. After the investment was made, and the plants were producing fertilizer, the United States government changed the thrust of its food aid programs and started providing Agriculture Minister Eugene Whelan farmers were able to respond faster than the farm machinery and fertilizer industries. I mentioned before that fertilizer demand shot up by 36.5 per cent across the west last year, and by another 25 per cent this year. That is an absolutely astounding increase for any industry. Thank goodness our fertilizer industry was producing a surplus that could be diverted to fill the domestic need! I am not suggesting that everything is 100 per cent okay, but our shortages and difficulties are certainly less severe than might have been expected. There is a shortage of transportation, and there is a shortage of some, raw materials we import, mainly rock phosphate and sulphate of potash. Rock phosphate prices were running at $3.50 a ton, f.o.b. Florida, three years ago. Today the price is $22 to $25 a ton. And transportation has _ been • a problem in all sectors of our economy in recent months. The fertilizer industry has joined the federal government in setting- up a special committee so we can iron . out transportation difficulties, and do everything humanly possible to move raw materials to fertilizer plants and to distribute finished fertilizers to farmers. The increased demand has quite naturally resulted in higher prices, but the price market. Now that they are in place they must serve our growing Canadian demand for the future. As our domestic demand increases, we can cut back nitrogen exports and use the supplies here in Canada. We cannot depend on imports in the meantime because import supplies simply do 'not exist. We cannot be placed- in the position where Canadian customers must wait for expanded new production facilities. The Canadian farmer cannot be placed in the position of having to compete with foreign producers assisted by Canadian inputs that they themselves have not been able to acquire to reach the position of excellence in competitive world markets I have just referred to. If anyone has to wait for expanded new fertilizer production facilities, it will have to be the foreign markets. As the Americans are so fond of saying, God helps those who help themselves. The United States has already taken steps to obtain the natural gas she will need to expand production of nitrogen fertilizer. It is rumored that the Occidental Chemical company has signed an $8 billion contract to buy anhydrous ammonia from Russia. In return, the United States will sell phoSphorous to Russia. The United States and Russia are moving to meet their fertilizedr demands. I think we should be doing the same here in Canada. I mentioned earlier that rock phosphate prices have increased from $3.50 to between $22 to $25 a ton, f.o.b. Florida. But we have some more costly supplies in Canada. If prices continue to climb, or supplies are not available, we can develop our own domestic deposits. There are supplies in the Canadian Rockies.. The problem in the past has not been the actual rock phosphate, because it is high grade material, but the difficulty of mining the deposits which tend to follow the mountain gullies. There are other supplies in the shield of eastern Canada. In fact, there was a thriving industry in the Perth area of eastern Ontario The other basic shortage this year has been sulphate of potash. We have plenty of muriate of potash in Saskatchewan, but we import all of our sulphate of potash from the United States, and supplies are extremely tight this spring. Sulphate of potash is important to the quality of some crops, particularly tobacco and potatoes. We know that we can manufacture sulphate of potash, using the huge supplies of sulphur available in Canada, and potassium chloride. The federal government has already spent a good deal of money backing a Canadian company which will use this process to produce sulphate of potash. So, in summary, we have the raw resources to supply more than enough fertilizer to meet our domestic needs. As world demand for food increases, production will have to increase and a good deal of that increase will come _ from more intensive farming of our land. SPRING SUPPLEMENT.to THE HURON EXPOSITOR,, 'THE BRUSSELS 'POST, 1974-3a You Get a Good feeli 000 E.--. LE. 3E I Mile East 'Bru Phone 327-61 cefiel4 5iimmilimiimmimmoimmilimimminimmilimmiimminimmiummuitimmimmomiummimmiliwimmimmimmmomuummiliumuffinutme . . . any year—and especially this . year—when your most important crop is planted to hybrids developed by the world's most productive hybrid research team. BUT.... THIS YEAR SEED CORN IS IN SHORT SUPPLY! 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