Rare mineral found primarily in Saskatchewan, home to the world’s largest mines and deposits
Anyone following the on-again, off-again trade war between Canada and the U.S. will have seen potash mentioned among major Canadian exports to the U.S. subject to President Donald Trump’s new tariffs.
But what is potash and why is it integral to the neighbouring nations’ trade relationship?
Here’s a guide to understanding the rare earth mineral and its part in the dispute.
What is potash and what is it used for?
Potash is a group of minerals and chemicals that contain potassium – K on the periodic table. Its main form, after deep-earth mining and milling, is as potassium chloride (KCl), almost all of which is used as a fertilizer to improve crop root strength, disease resistance, water retention and yield by protecting and restoring soil fertility, making it essential to global food security.
Small amounts are sometimes used in other products like detergents, soaps, water softeners, snow and ice melters, and pharmaceutical products using it as a potassium compound — often an acetate or chloride used to treat low potassium (hypokalemia).
Where is potash found in Canada?
All 11 active mines in Canada are located in the prairie province known as the country’s “breadbasket” for its farming formidability.
Where is potash found in the world?
The only other significant players in the potash market at this time are Russia and Belarus, but as of 2023, their combined output only just eclipses that of Canada.
Both countries have seen their production drop since the invasion of Ukraine destabilized the industry and sent prices surging globally. Prices have returned to near normal and stabilized since.
China, Israel, Germany and a handful of other nations are small producers.
Very little potash mining occurs in the U.S., but the survey notes domestic deposits totalling approximately seven billion tonnes.
How much does the U.S. rely on Canada’s potash?
The U.S imports 90 per cent of the potash its farmers need annually and 85 per cent of it comes from Canada. Almost half of the product out of Saskatchewan in 2023 went to the U.S. market.
The OEC valued the international trade at US$3.66 billion.
The U.S. gets about 11 per cent of its potash from Russia.
What’s happening with our potash amid the trade war?
As tariff talk intensified in the new year and in the one-month delay through February, American farmers have been stockpiling potash in an effort to alleviate some of the near-term sting.
In a statement to the National Post, Nutrien, the largest of Canada’s big three potash producers alongside K+S Potash Canada, and Mosaic Company, said it, too, had “moved as much potash south of the border as possible ahead of the spring planting season.”
What are U.S. officials and organizations saying about the tariff on potash?
Thursday, in announcing an overall delay and a carveout for goods shipped under the existing Canada-U.S.-Mexico Agreement, Trump offered farmers a small reprieve by also reducing the import tariff on Canadian potash to 10 per cent instead of the promised 25 per cent.
In a press release, newly-appointed U.S. Secretary of Agriculture Brooke Rollins called it “a smart, strategic move” and said “Canada must commit to fair trade practices — including those in dairy, eggs, and poultry.”
The Fertilizer Institute (TFI) and the American Farm Bureau (AFB), both of which had expressed concern about undue hardship on their respective memberships and pleaded with the president to change course, expressed gratitude when he did.
Potash could replace oil exports as Canada’s next card in a U.S. trade war
What is the position of Canadian entities on tariffs?
While there’s no potash mining in his province, Ontario Premier Doug Ford is bullish that Saskatchewan Premier Scott Moe should restrict the product’s flow to the U.S.
In a statement, Moe said Canada’s response to the tariffs must be “economically sound and reasoned” and his province was considering its next moves.
As for Nutrien, the company said it’s working with both federal governments, the province and stakeholders to raise concerns about a tariff it believes will be borne by farmers.
In a fireside chat with the Bank of Montreal last week, President and CEO Ken Seitz said, “if you look at where the potash price is today on the sort of global cost curve, while it’s firming, certainly there wouldn’t be many producers that could absorb a 25 per cent knock from a tariff.”
Fertilizer Canada echoed many of the same concerns and warned that the tariffs will “distort the U.S. market in favour of countries such as Russia and China, who do not operate under the same environmental, human rights and trade practices, undermining the critical trade goals of each of our countries,” it wrote in a statement to the National Post.
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