By Steve Halabura
For those who know me, you will agree with me that I tend to avoid matters of politics or religion, these being somewhat private and personal matters. However, devoted readers of “‘Nuff said” may have reason to disagree, as you will have heard me say this before – “the potash apple does not fall from the political tree”. This is especially true here in Canada’s potash heartland – Saskatchewan – and recently, a matter of discussion at the federal level.
Politics and potash? Even more so now, when at the global, geopolitical level, fertilizers are grabbing almost as much attention as oil. Potash and fertilizers in general as political as oil? Given the recent developments in the Middle East, especially the Strait of Hormuz, maybe so!
Before I delve into the specifics of what my experience tells me may develop over the next 12 to 24 months, I want to set a stage by looking upon the situation that is developing in Canada.
A month ago, during one of his diplomatic and economic journeys across the globe, Canadian Prime Minister Mark Carney visited Australia, where he was warmly welcomed by his Australian counterpart, Anthony Albanese.
For those of you who are not Canadian or are lazy and lump him together with our recently departed Justin Trudeau, Prime Minister Mark Carney is an interesting fellow. An economist by training, Carney served in the public sector as a bureaucrat in the Department of Finance and the governor of two central banks (Canada and England), as well as part of the private sector as vice-chair of one of Canada’s largest investment firms – Brookfield Asset Management.
While most of us spent the COVID-19 lockdown year binging on streaming dramas (think The Last of Us x10), Carney wrote a book called Value(s), setting forth his far-ranging worldview of where global finance has been and where it may be going.
Given this background, when Carney opines on a subject, I tend to listen.
Here is what he told the Australians: given that the post-war “global architecture is breaking down from consecutive crises”, it is time for middle powers, what used to be called the “non-aligned” nations, to form new, strategic partnerships.
It sounded like what he told the assembly at Davos in January, where he declared the old, rules-based order dead, to be replaced by something not yet fully formed. The secret to surviving in this new world, according to Carney, is not to double down on “sovereign autonomy” but rather form new partnerships especially where such partnerships demonstrate global strength, such as defence, security, and (here it gets interesting) as suppliers of “trusted democratic mineral reserves”.
Carney pointed out that Canada and Australia produce one-third of the world’s uranium and lithium, and more than 40 per cent of its iron ore, but what was left unsaid is that Canada provides 34 per cent of the world’s potash.
Prescient thinking. Looking at the situation today, the war between Iran, America, and Isreal has further demonstrated the impact that such conflicts have upon today’s economy, especially the fragility of global supply chains.
Which brings us to the Strait of Hormuz. Closure of the strait sent global energy trade into turmoil, with consequences yet to be fully understood. The closure also impacts fertilizers, particularly nitrogen and phosphate-based products like urea and DAP.
Just a point of clarification – I have read, in recent weeks, those who tie the closure of the strait to possible upheavals in potash pricing. I do not believe this is correct, as very little potash is produced in the countries bordering the Persian Gulf, so there is little export impact.
However, there is an impact upon current suppliers of potash, probably not in the aspect of pricing, but certainly in the aspect of security of supply. This also includes collusion between Saskatchewan’s main competitors, Russia and Belarus. I asked my colleague, Joshua Mayfield, growth minerals analyst for Hallgarten & Co., if this is reasonable or me simply being paranoid. Here is Mayfield’s view:
“Russia and Belarus production seems to be co-ordinated. The combined production of the two states surpassed Canadian output in 2024 and 2025, an effort that started after Russia invaded Ukraine and faced sanctions.” (Joshua Mayfield, pers.comm.)
Sounds sinister, but keep in mind how this coordinated potash product makes its way to K-hungry buyers in Asia. Potash supply makes its way to India and Asia by means of the Suez Canal and then via the Red Sea via the Bab-el-Mandeb, a 20-mile chokepoint between Yemen (the Arabian Peninsula) and Djibouti/Eritrea (the Horn of Africa). Houthi rebels have fired missiles at shipping for some time, and during the recent Iran conflagration, missile and drone strikes increased.
Hmm… Belarusian and Russian potash making its way to market via another geopolitical chokepoint? Yup, sounds secure to me…
Let’s play out a scenario: you are a “mid-level” distributor or processor (which I define as a purchaser within the 100,000- to 300,000-tonne annual range) located in a “middle power” nation that needs potash (MOP or soluble “white” grade product), and for the sake of meeting your customer’s expectations, require firm, dependable delivery with relative constancy of quality and also stable price. You could source your supply from a producer that ships its product through a supply chokepoint, thereby introducing risk, or you could pivot to a more stable supplier, like Canada. This is especially more palatable if your nation has struck a “middle power” trade deal with Canada.
If other mid-level buyers are thinking the same way and decide to pivot to a Canadian supplier, an interesting situation may arise whereby value (meaning security of supply) is deemed more important than price. Does this lead to a situation where there is an increase in demand for Saskatchewan potash, even in the face of a rising price point?
This may be a moot point if there was significant idled capacity in Saskatchewan, but I don’t think this is the case. If so, then the question is, “can Saskatchewan producers make more product in the short-term, if indeed there is a security-driven rise in demand for Saskatchewan-sourced potash?” Another very interesting question, as one could respond by pointing to the impending production from BHP’s Jansen mine. Yet here too there is a concern regarding Jansen’s ability to supply a near-term solution. In a press release by BHP dated January 20, 2026, the company admitted that Jansen Stage 1 will increase to US$8.4 billion, the first production schedule has slid to mid-CY2027.
I asked Mayfield as to his view on the near-term future of new potash product sourced from Saskatchewan, and here it is:
“Jansen represented a company-wide shift into what BHP told investors were ‘future facing commodities with attractive long-term fundamentals’. The two other commodities included in this category were copper and nickel. The shift came as BHP divested from its oil and gas assets and tried to broaden its portfolio beyond coal and iron ore. Canberra increased royalties on coal in Australia in an attempt to pressure the miner to reduce production,” he says.
If you want to dig a bit deeper on this issue, check out the following article from The Globe and Mail, April 3, 2026:
In July 2025, the estimate was US$7.0 billion to US$7.4 billion, up from a previous estimate of US$5.7 billion when the project was approved in August 2021. BHP blames the cost and schedule overruns to “inflationary and real cost escalation pressures, design development, and scope changes and lower productivity outcomes”.
It seems to me that an immediate solution to ramping up “safe and secure” potash supply from Saskatchewan still may be out of reach.
How reasonable is the possibility of a buy-side pivot from price to value? On this point, I return to Carney and his book, Value(s), where he plainly states in the preface how a revolution in economics during the Industrial Revolution, “led to the view, widespread today, that the price of everything is the value of everything” (italics mine). Carney believes this is erroneous thinking, and that the world is entering into a new phase of trade wherein value, once again, achieves dominance over price. I assume that during his trade missions to greater Asia, Carney made this point clear.
Am I arguing for a separate “safe and secure Saskatchewan spot” potash price? As an old-school classical liberal (as I believe Carney is), I am not one for mechanisms that impede the market in its role of determining the price of a commodity. However, I do agree that the calculus used to determine price must change to allow for the pricing of what has been, up to this point, intangible, that being security of supply.
Nevertheless, I like the ring to the name, “safe and secure Saskatchewan spot”. Maybe there will be a solution to the conflict currently engulfing the Middle East, but remembering being a kid watching an inebriated uncle crush a hornet’s nest with his bare hands, it’s tough to control the havoc caused by an irrational act.
Furthermore, there isn’t much I can do to solve anything on the “macro” side; however, as the co-founder and CEO of a “potash junior”, maybe it is hard-core “hammer down” time, just like it was 20 years ago, in 2005.
Why am I so bullish? Let’s let Mayfield present the final view:
“The future facing commodities strategy is all about megatrends. Feeding the world is a megatrend. Modernization is a megatrend. I just think potash fits.”
Thank you, Joshua!
‘Nuff said!
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