StatsCAN Plus

Canadian fertilizer filling a growing need

September 27, 2023, 11:00 a.m. (EDT)

Canada was the world’s third-largest exporter of fertilizer in 2021, following Russia and China. In the wake of Russia’s invasion of Ukraine, Canada’s fertilizer exports more than doubled from a year earlier and Canada became the second-largest exporter in the world, following Russia, in 2022.

During the first six months of 2023, pesticide, fertilizer and other agricultural chemical manufacturing sales reached $6.2 billion for the second straight year, with $2.8 billion destined for export. Fertilizers account for most of the weight in this broad industrial classification. Fertilizer sales during the first six months of 2023 were comparable with the five-year annual average of $6.2 billion in sales and $3.6 billion in exports from 2017 to 2021.

The strong increase in fertilizer sales built on the rising trend that started in early 2021, when prices for fertilizers and natural gas—the primary feedstock for fertilizer production—started to soar, mainly because of supply chain challenges.

The average prices for ammonia and chemical fertilizers (+52%) and natural gas (+16%) rose sharply in 2021 and peaked during early 2022. Starting in June 2022, prices began to stabilize or fall. As a result, average prices for chemical fertilizers and natural gas in the first half of 2023 were both about one-third lower compared with the same period in 2022.

According to the Industrial Product Price Index, the price index for fertilizers, pesticides and other chemical products fell from 171.7 in July 2022 to 125.4 in July 2023. Over the same period, the price index for natural gas fell from 129.0 to 84.4.

Canada is now the leading potash producer in the world

The conflict between Russia and Ukraine exacerbated the already tight global supplies, creating more demand for Canadian fertilizer, especially potash. Exports of potash—Canada’s most important fertilizer—more than doubled (+130.5%) in 2022 compared with a year earlier, making Canada by far the world’s leading potash producer in 2022.

Fertilizer production is concentrated in Alberta and Saskatchewan. In May 2023, the pesticide, fertilizer and other agricultural chemical manufacturing industry reported 7,057 employees on their payroll. Employees earned on average $1,736 a week, above the Canadian average of $1,200.

Fertilizer sales usually peak in May during the spring planting season. In May 2023, fertilizer sales were up by almost one-third (+29.1%) year over year to a record monthly high of $1.8 billion. Exports (+5.7%) and prices (+3.9%) for fertilizer, pesticide and other chemical products were also both up in May compared with one month earlier.

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