Question Period Note: EXPORT SALES VISIBILITY IN THE CANADIAN GRAIN SECTOR

• The Government of Canada is committed to supporting competitiveness across the agriculture sector as well as a strong Canadian grain sector. We recognize the critical contribution of Canada’s grain sector and its stakeholders to our economy and we will continue to ensure a grain trading environment that is fair and balanced.
• We are committed to delivering concrete support to producers through our agriculture programming, policy and innovation supports. We are actively working to diversify export markets and remove barriers to trade so Canadian farmers are less exposed to global shocks and trade disruptions.
• We will continue to engage with stakeholders across the grain sector – including farmers and grain handlers – in considering how best to address export sales visibility in a way that preserves and prioritizes our competitiveness.
• We recognize the value that greater visibility into forecasted demand, export sales, and grain shipment information would represent for producers. However, commercial sensitivity concerns must also be carefully considered to ensure we don’t compromise our competitiveness – Canada’s grain handling sector is concentrated compared to many international competitors, and so international approaches are not a “one size fits all.”

Fertilizer Production and Canadian Imports
Fertilizer products vary depending on the nutrients sought by growers, but generally, the most important nutrients are nitrogen (N), phosphorus (P) and potassium (K). Farmers will apply fertilizer with different ratios and amounts of these nutrients depending on the crop they are growing. For example, a high ratio of nitrogen is used to grow corn, while soy requires minimal nitrogen as it produces its own. Farmers largely depend on synthetic fertilizers, as opposed to organic fertilizers such as manure, due to their higher nutrient content. There are currently no valid cost-effective alternatives to synthetic fertilizers.
Nitrogen fertilizers are produced from natural gas, while phosphorus and potassium are mined. Canada is the world’s largest producer and exporter of potassium and is self-sufficient. Over 90% of Canadian potassium (potash) fertilizer production is typically exported, and import quantities are very small. Canada largely relies on imports of phosphorus fertilizers, primarily from the United States. Canada is a net exporter of nitrogen fertilizers with 45% of its production being exported. However, this production is concentrated in Western Canada, and it is often cheaper for Eastern Canada to import fertilizer than transporting it by rail from Western Canada. As such, Eastern Canada is dependant on nitrogen fertilizer imports, most of which came from Russia prior to 2023. In 2022, the Canadian government withdrew Russia and Belarus’s entitlement to the Most-Favoured-Nation (MFN) tariff. This resulted in a 35% tariff on virtually all goods that originated in these nations, including fertilizers. This has led to imports of nitrogen from alternative sources such as Northern Africa, the Caribbean, along with continued trade with the United States.
Fertilizer and fuel are the largest on-farm expense for crop producers accounting for up to 54% of production costs for crops such as corn. The price of fuel is generally determined by the forces of global supply and demand, and the agricultural sector is largely a price taker for both diesel and gasoline. As in the case of fuel, fertilizers are also internationally traded commodities, and Canadian prices are determined by global supply, demand and other factors.
Impacts of the Conflicts in the Middle East and Ukraine on the Price of Nitrogen Fertilizer
Following the Russian invasion of Ukraine, nitrogen fertilizer, nearly doubled in price in 2021 and rose further in 2022. Since then, most regular trading routes on world nitrogen markets have reopened and, prices have fallen.
The conflict in the Middle East has resulted in new trade disruptions through the Strait of Hormuz. This has resulted in a rapid price increase of nitrogen fertilizers. The region is a major export hub, as about 25% of globally traded nitrogen fertilizer transits through Hormuz. Nitrogen fertilizer prices typically rise with energy markets because ammonia production depends heavily on natural gas and oil.
Commodity trading websites indicate that urea was trading at around $650 USD per ton on March 10 compared to around $400 USD per ton early January 2026, However, nitrogen has not reached the price peak it had attained during the beginning of the Russian invasion at over $900 USD per ton, back in 2021 and 2022.

Sourcing Nitrogen fertilizer on Canadian farms
Western Canada is self-sufficient and has access to resilient and diversified North American supply routes for its nitrogen. While Eastern Canada is dependant on nitrogen imports and importers have typically secured approximately 80 to 90% of required volumes for the 2026 growing season. Most product is already in Canada or in transit in the Atlantic for the upcoming 2026 growing season. Eastern grower groups have indicated to their members that they do not anticipate any immediate short-term supply issues but are actively monitoring market conditions and the evolving geopolitical situation. Furthermore, depending on the province, up to ninety percent of Canadian agricultural producers have pre-booked their fertilizer purchases. However, the remaining “late buyers” may face price increases or allocation limits due to retailers’ risk management strategies. A prolonged conflict in the Middle East could further tighten global fertilizer supplies and put additional pressure on fertilizer prices.
Other fertilizers are less volatile
Potash fertilizer is less exposed to Middle Eastern disruptions because they are mined by very large producers such as Canada and Belarus. China and Morocco are the world’s top phosphorus producers. However, Saudi Arabia is third and phosphorus prices have recently increased, albeit to a much lesser extent.
Available Support for Farmers Amidst Rising Fertilizer Prices
The federal-provincial territorial business risk management suite is available to help producers manage losses caused by risks that are beyond their control, such as natural disasters, weather events, and severe market volatility. Existing programs, such as AgriStability and AgriInvest, are in place to assist producers when they experience income declines, both large and small.
Additionally, the federal government offers the Advance Payments Program (APP), a federal cash advance guarantee program that provides agricultural producers with easy access to low-interest cash advances.
The Government temporarily increased the $100,000 interest-free limit on advances under the APP across multiple program years, representing a total savings of $226.9 million for producers over the four-year period (2022 to 2025).
On March 7, 2025, it was announced that the interest-free limit was being temporarily increased to $250,000 for the 2025 program year. Participating producers could save on average $5,000 in interest costs.
In September 2025, the Government of Canada also announced that the Advance Payments Program (APP) interest-free limit will be set at $500,000, for canola advances, for the 2025 and 2026 program years. For 2025, 22,589 producers have received $4.7 billion in advances to date, and a total of 13,724 producers have received interest-free advances above $100,000.
OFCAF Support – Nitrogen Management
AAFC’s On-Farm Climate Action Fund (OFCAF) can directly support producers in the adoption of nitrogen management practices that will help optimize fertilizer use and reduce GHG emissions from synthetic fertilizer. Farmers can access nitrogen management funding from most OFCAF delivery organizations nationally, which will help support the costs of adoption. Through the adoption of these practices, farmers can reduce the amount of excess fertilizer that enters water bodies, helping to protect and preserve these ecosystems.
First announced in Budget 2021, the $704.1 million On-Farm Climate Action Fund is an initiative to help farmers tackle climate change. The Fund is part of the Government of Canada's Agricultural Climate Solutions initiative, which falls under the Natural Climate Solutions Fund.
The 2025-2028 expansion of the fund provides an additional $300 million to 13 initial recipient organizations to continue supporting farmers in their efforts to become more climate resilient.

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