The recent spark in conflict in the Middle East has sent fuel prices skyrocketing around the globe. According to gasbuddy.com, prices in Dauphin are between $1.40 and $1.50 per litre, a significant spike compared to past weeks.
Don Tarrant, Owner and General Manager of Reit Syd Equipment, says farmers especially should be prepared for the increased input costs.
"If grain prices jump up here in response to the cost of growing the grain it won't be as much of a hit, but with current grain prices and now another spike in inputs, you're going to see very quickly the farm fuel and consumer fuel going up a lot...fuel is a big input into growing crops, second thing is nitrogen fertilizer which is made from natural gas, natural gas is also going to be pushed up maybe a fair bit and the transportation of that, and also the Middle East does supply a lot of nitrogen fertilizer. We make our own in Canada, but it does push the world price up, which will push the price up here in Canada as well," said Tarrant.
Fuel and fertilizer are major inputs to growing crops, but there are other smaller inputs that farmers will have to account for as well.
"Things like tires, anything with any petroleum content. Not a big thing on the farm, but tires are a part of that, but definitely the real quick ones that are going to hit the customers or growers is the fuel cost, fertilizer cost, and then the dollars they have to spend on top grade equipment are definitely going to take a hit if we don't see a spike in grain prices...so I think immediately we're going to see the effect and it's going to be a very significant one, but it's really going to start to change customers' ability to buy through the summer through fall if things don't rapidly de-escalate and do get back to normal," said Tarrant.
Tarrant has been in the agriculture industry for a long time. With his experience, he has some recommendations to hopefully help farmers save a bit on inputs.
"I think the best thing to do is phone their fuel supplier this morning and fill up for storage as much as they can take in, second thing is I would think they should phone their crop input supplier and book their nitrogen fertilizer today as well," said Tarrant.
United States and Israeli strikes on Iran started on February 28th. Since then, according to gasbuddy.com, the average gas price across Canada has jumped from $1.33 per litre to $1.55 per litre.
