Red potash at a warehouse at Nutrien’s Cory Potash mine near Saskatoon. Canada is a leading exporter of potash, a critical fertilizer component.The Globe and Mail
Asim Biswas is a professor and the Canada Research Chair in digital agriculture and the Ontario Agricultural College Research Chair in soils and precision agriculture at the University of Guelph.
When Canadians think about the coming growing season, they tend to look at weather forecasts. But another force may prove just as important: energy markets. Those signals are flashing again this year, not because of weather, but because of renewed geopolitical instability in global energy markets.
Modern agriculture runs on energy long before tractors enter fields. Fertilizer production, particularly nitrogen fertilizers such as ammonia and urea, depends heavily on natural gas. In fact, natural gas, as both a feedstock and energy source, accounts for roughly 70 to 80 per cent of the production cost of nitrogen fertilizers. When energy prices spike or supply chains fracture, the shock moves quickly from gas pipelines to fertilizer plants and eventually to farmers’ input bills.
Geopolitical tensions have made that connection increasingly visible. Russia is one of the world’s largest suppliers of nitrogen and potash fertilizers. When it invaded Ukraine in 2022, sanctions, trade restrictions and shipping disruptions reshaped global fertilizer markets almost overnight. At the same time, volatility in European natural gas markets forced fertilizer plants across the continent to scale back or temporarily shut down production.
More recently, escalating tensions involving Israel, Iran, and the United States have raised fresh concerns about energy supply disruptions through the Strait of Hormuz. Natural gas prices have shown upward pressure in response to these uncertainties, increasing production costs for nitrogen fertilizers worldwide. For farmers heading into this growing season, that volatility translates into continued uncertainty in fertilizer pricing and availability at a time when input decisions are already being finalized.
The result is a fertilizer market still defined by volatility as farmers enter this growing season.
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For Canadian farmers, fertilizer prices remain one of the largest financial risks, and recent geopolitical tensions have added renewed upward pressure. Fertilizer often represents the single biggest input cost for grain producers. When energy markets tighten owing to conflict or supply disruptions, fertilizer prices tend to follow. As a result, farmers face difficult choices: reduce fertilizer application rates, shift cropping decisions to plant crops that require fewer inputs, or absorb higher production costs in the hope that commodity prices remain strong.
Each of these choices carries consequences. Reducing fertilizer use can lower yields. Changing crop rotations may disrupt established markets or logistics. Absorbing higher costs raises financial risk, especially for smaller producers operating on thin margins. In a global food system already strained by climate variability and geopolitical instability, these decisions ripple outward to food prices and supply.
Canada occupies a unique position in this landscape. It is one of the world’s largest exporters of potash, a critical component of global fertilizer supply. Canadian potash production plays a stabilizing role in international markets, especially when other suppliers face disruptions. At the same time, Canada’s agricultural productivity depends heavily on nitrogen fertilizers produced from natural gas. This dual role – both supplier and consumer – creates both vulnerability and opportunity.
Energy policy, fertilizer production capacity and agricultural policy are often discussed in separate silos. But the coming growing season highlights how deeply interconnected they are. Ensuring stable fertilizer supply is not only an agricultural issue; it is also an energy security issue and a food security issue.
A tractor loads fertilizer for use on a soybean field near Brasilia, Brazil in 2022. Energy policy, fertilizer production capacity and agricultural policy are deeply interconnected in a global food system that is experiencing overlapping shocks.ADRIANO MACHADO/Reuters
The global food system is entering an era of overlapping shocks. Climate change is intensifying droughts, floods, and heat waves across major agricultural regions. Trade tensions and war are reshaping supply chains. Energy markets remain volatile as countries navigate the transition toward lower-carbon economies.
In this environment, fertilizer becomes more than an input. It becomes a strategic resource.
Canada has an opportunity to strengthen resilience across this entire system. Expanding domestic fertilizer production capacity, supporting innovation in nutrient efficiency, and investing in technologies that improve fertilizer use efficiency can reduce vulnerability to global shocks while maintaining high agricultural productivity.
At the same time, policy frameworks that encourage soil health and nutrient stewardship can improve long-term productivity without compromising yields.
The goal should not simply be to produce more fertilizer, but to use it smarter.
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Global geopolitics may remain unpredictable. Energy markets will continue to fluctuate, although energy prices may stabilize if geopolitical tensions ease. But Canada’s ability to adapt its agricultural systems can help buffer farmers and consumers from the worst of these shocks.
The next harvest will depend not only on rain and sunshine, but also on decisions made far beyond farm fields: in energy markets, fertilizer plants, and geopolitical negotiations.
Understanding that connection may be the first step toward protecting Canada’s food system in an increasingly uncertain world.