Rising costs, global uncertainty prompt calls to modernize Alberta’s agriculture sector: report

Calgary Chamber of Commerce report urges governments to better support Alberta's agriculture sector as farmers face rising costs and supply chain pressures

A new report from the Calgary Chamber of Commerce is urging governments to modernize policies supporting Alberta’s agriculture sector, as farmers grapple with rising costs, supply chain pressures and growing global uncertainty.

The report, Growing Alberta’s Global Agriculture Advantage, comes at a time when input costs — including fuel and fertilizer — have surged, while geopolitical tensions and trade uncertainty continue to cloud the outlook for producers across the province.

“The agriculture sector has long demonstrated resilience in the face of trade disruptions and rising costs,” said Deborah Yedlin, president and CEO of the Calgary Chamber of Commerce.

“But resilience alone is not enough.”

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Yedlin said Alberta’s reliance on a limited number of export markets leaves producers vulnerable to sudden policy shifts, making it harder to compete globally.

“There is a clear role for both federal and provincial governments to reduce these pressures by investing in trade-enabling infrastructure, including increasing rail and port capacity, addressing labour shortages and removing interprovincial regulatory barriers that limit growth,” she said.

Costs climbing, uncertainty growing

The report highlights a confluence of challenges facing the sector from volatile fertilizer prices to ongoing drought conditions and uncertainty around global trade relationships.

Recent conflict in the Middle East has disrupted key fertilizer supply routes, driving up prices at a critical time for farmers heading into the spring planting season.

“Whether it’s rising costs, whether it’s a labour issue, whether it’s access to markets, sufficient transportation infrastructure to get products to market. These are conversations that we’ve been hearing for a while,” said Yedlin.

She pointed specifically to the Strait of Hormuz, where a significant portion of the world’s fertilizer supply passes through.

“So, when you think about cost, this is terrifying,” Yedlin said.

For farmers on the ground, those rising costs are already having a direct impact on operations.

“Prices are changing daily,” said Stephen Vandervalk, a farmer based near Fort Macleod and vice-president of the Wheat Growers Association.

“The biggest thing for farmers probably would be fertilizer because obviously, we can’t grow crops without it.”

Vandervalk said fertilizer prices have roughly doubled in less than a year.

“We started off at about $600 per ton and today, last I heard, it’s over $1,200 per ton,” he said.

“So, you’re definitely going to see yields come down, because you’re just not going to be able to afford to put on as much fertilizer as you would like.”

He added that fuel costs have also surged, further squeezing margins.

“We were at about $0.95 to a dollar for farm diesel, now we’re a buck fifty,” Vandervalk said.

The uncertainty is leaving many producers unsure how to plan for the months ahead.

“It’s kind of unprecedented, you kind of just don’t know what to do,” he said. ,

“Do I buy or do I wait? It’s kind of like deer in the headlights a little bit.”

Supply chains under strain

Experts say those challenges are being compounded by broader supply chain issues that are increasingly affecting the agriculture sector.

“Farmers, ranchers, they face higher fuel price, fertilizer costs, climate volatility, trade uncertainty — all of these things are now fast becoming supply chain bottlenecks,” said Dr. Rajbir Bhatti, associate professor of supply chain management at Mount Royal University.

Bhatti said the sector itself remains strong, but the systems surrounding it have not kept pace with today’s realities.

“The agriculture sector, per se, in itself, is okay. The farmers are doing a great job, but they are not being supported by the ecosystem in terms of resilience,” he said.

“The ecosystem was designed for a different era.”

That mismatch is creating new risks for producers, particularly when it comes to getting products to market.

“It’s not about growing food, it’s about moving food,” Bhatti said. “If Alberta wants to compete globally, it needs that infrastructure.”

He pointed to rail capacity, port congestion and interprovincial trade barriers as key friction points that can delay shipments and reduce price opportunities.

“Market access is strategy, and we need to provide them proper, robust supply chain infrastructure,” he said.

Bhatti said addressing those challenges will require a coordinated approach across government, industry and academia.

“Policy planning and modernization is not something we can leave for tomorrow. It has to begin today,” he said.

Calls for policy modernization

The Calgary Chamber’s report outlines a series of recommendations aimed at strengthening the sector’s long-term competitiveness.

These include modernizing agricultural insurance programs to better reflect climate risks, expanding access to capital for farm succession, investing in technology adoption and improving rural broadband connectivity.

Yedlin said workforce challenges also remain a significant concern, with an estimated 1,900 agricultural jobs expected to go unfilled in Alberta by 2030 costing the sector an estimated $3.5 billion in lost sales.

“We need to figure out how we connect people to their food supply, and how do we do that from an educational standpoint, to motivate people to choose a career in the ag sector,” she said.

She also pointed to barriers facing younger farmers trying to take over family operations.

“When it comes time for them to try and purchase that farm, it’s really, really difficult,” Yedlin said.

At the same time, broader uncertainty, including the upcoming review of the Canada-United States-Mexico Agreement (CUSMA), is adding another layer of risk.

“We don’t know how the renegotiation of CUSMA will unfold,” she said.

“Uncertainty is the enemy of investment.”

Inland ports and trade infrastructure key

One of the solutions highlighted in the report and echoed by experts is increased investment in trade-enabling infrastructure, including inland ports.

Yedlin pointed to the Prairie Economic Gateway project as a key example in the Calgary region.

“That is going to be a very big inland port, very important,” she said.

“It’s going to be plugging into the infrastructure that we already have and building on it.”

The Prairie Economic Gateway is a joint initiative between the City of Calgary and Rocky View County aimed at creating a rail-served inland port hub to improve logistics, expand market access and strengthen supply chains.

Bhatti said inland ports can help reduce congestion at traditional seaports by moving goods more efficiently through inland hubs.

“Rather than loading or unloading on the traditional ports, we try to ensure goods keep moving to the hinterlands,” he said.

“This is the future of efficient supply chains.”

Improved infrastructure could also help Canada capture more value from its agricultural exports, according to Stuart Smyth, a professor of agricultural and resource economics at the University of Saskatchewan.

“Canada could export more if our export facilities in Vancouver were more reliable,” Smyth said.

“The fact that the trains are restricted, boats are having to wait for too long to be loaded, they’re just turning to the United States, to Australia.”

While many of the current pressures are being felt at the farm level, experts say consumers are likely to see the effects in the coming months.

“Eighty per cent of the produce that we consume in Canada is coming from the southern U.S.,” Smyth said.

“Those higher fuel costs, without a doubt, are going to get passed on to us as consumers.”

He said grocery prices may begin to rise as early as late spring, as retailers renegotiate supply contracts.

“We’ll see sort of sticker shock show up in May,” Smyth said.