Red Deer (Rural Roots Canada) – For Canadian farmers, the end of harvest doesn’t necessarily mean the end of the financial strain.
With diesel prices remaining stubbornly high, producers are now sitting down to calculate what the fuel bill means for their operations, their equipment purchases and, in some cases, how much land they can afford to farm next year.
John Barlow, Member of Parliament for Foothills and the Conservative shadow minister for agriculture and agri-food, says the financial pressure is becoming increasingly evident among producers, trucking companies and manufacturers.
“We had some farmers this week show us their books and show the impact that diesel has had on their operations, and now they’re trying to figure out: how do we absorb these costs?” Barlow tells Rural Roots Canada at this year’s Agri-Trade. “You also have these trucking companies, and the manufacturers are here saying, ‘We’re having to make some pretty tough decisions on what we’re going to do with a diesel price that’s twice as high as it was last year.’ ”
The numbers he’s hearing from farmers illustrate just how dramatically fuel expenses have changed.
“One farmer here said their fuel bill last year, just for harvest, was about $50,000. This year it’s close to $150,000,” Barlow says.
“That is something they did not budget for when they were doing their planning last year. So that’s the difference between being economically viable and on the verge of having to make some really hard decisions. That is just a common thread that we’re hearing from pretty much every producer that we’ve talked to here this week.”
Barlow says those costs are difficult to absorb in an industry where producers have limited ability to pass additional expenses along to customers.
Related: Farmers across the Prairies weigh in on soaring diesel costs
The financial consequences extend beyond the farm gate.
“When you are increasing the price on the farmer, the trucker, the manufacturer, the processor, and the retailer, that is exponential growth everywhere along that supply chain. Of course, it’s going to increase the price of groceries. It increases the prices of everything,” he says.
Barlow acknowledges international events have contributed to fuel price volatility, including the war in Iran and the Russia-Ukraine war, but says Canadian policies are also contributing to the higher costs.
“For sure, global issues have had an impact. There’s no question about that. However, when you look at the data, where the diesel prices in Canada are $0.37 a litre higher than they are in the United States, $0.34 a litre higher than they are anywhere else in the world, these are Canadian-made problems caused by inflationary spending, lack of capacity, regulatory red tape that is just stifling our ability to grow. So let’s deal with the things that we can control here.”
Barlow is calling on the federal government to eliminate taxes on diesel from now until Canada Day, including the fuel regulation standard tax, and accelerate approvals for additional refining capacity and energy infrastructure.
He believes those measures could provide immediate relief while addressing longer-term supply challenges.
“The Liberal government should take responsibility for the barriers that they have put on that have led to this kind of higher prices in Canada,” says Barlow.
For producers, however, the immediate concern remains how to manage expenses that have already accumulated.
As Barlow sees it, the pressure on farmers ultimately becomes a pressure on consumers. And while farmers may be accustomed to managing uncertainty, he argues, resilience alone won’t cover the growing cost of keeping their operations running.
