Canada Rail-Strike Threat Latest Upset to Fertilizer Supply

(Bloomberg) -- A labor dispute at one of Canada's largest railways is threatening to further disrupt global supplies of fertilizer just as farmers need key nutrients to plant spring crops.

About 3,000 workers at Canadian Pacific Railway Ltd. have voted for a plan to strike March 16, if necessary, according to their union. Canada, along with Russia and Belarus, is one of the main sources for the world's potash, a commonly used fertilizer that contains potassium. A potential work stoppage comes amid concerns of shortfalls in supplies amid Russia's invasion of Ukraine and sanctions on Belarus.

“The disruption at CP in the middle of spring has a potential devastating impact on the ability to supply the American farmer,” said Jeff Blair, chief executive officer of GreenPoint Ag, an agriculture supply company in the southern U.S.

CP has offered wage increases for a two-year collective pact and has agreed to 20 union demands, spokeswoman Salem Woodrow said in an email. The union leadership “appears poised to force a shutdown of the essential rail supply chain” in mid-March by making unreasonable demands, she said.

“A work stoppage of any duration at CP will impact virtually all commodities within the Canadian supply chain, thereby crippling the performance of Canada's trade-dependent economy,” Woodrow said.

Shipping woes have also been driving lumber prices higher and the threat of a CP strike will just “exacerbate an already tough situation,” said Kevin Mason, managing director of ERA Forest Products Research. Lumber futures in Chicago rose by the exchange limit Wednesday to $1,268.70 for 1,000 board feet, a two-week high.

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