Things are certainly different to how they used to be. The unprecedented volatility experienced across all industries during and since the pandemic has caused widespread disruption to many supply chains. These are worrying times for economic and food security. Worries that are heightened by the war in Ukraine. And especially fears about fertiliser supplies.
Agriculture has borne the brunt of supply chain disruption. Although much of the fertiliser market volatility we’ve seen kicked off in September 2021 when CF closed their Ince manufacturing plant, I can trace the roots of our current woes back to before this, before gas prices rose to record levels and before there were even whispers of a Russian invasion of Ukraine.
If I take you back to May 2021, the annual price resets of nitrogen fertilisers were smaller than normal. For me, this was the first warning of price and availability concerns as raw material costs for manufacturers started to upturn as the world slowly returned to normality after the peak of the COVID-19 pandemic.
Since then, we have seen record gas prices in Europe causing the cost of ammonium nitrate fertilisers to rise from £195/tonne where they were the year before to £280/t in May 2021 and then, thanks to trade sanctions placed on Russia (which exports 20% of global fertiliser supplies) to £750/tonne. This eye-watering price even reached the high of £900/tonne in Spring 2022.
Other major nutrient fertilisers used in agriculture such as phosphate and potash have also risen to record price levels. The fertiliser price frenzy is causing cashflow concerns and many a crisis meeting for agricultural businesses to discuss whether with the increased cost of agricultural inputs makes growing certain crops financially viable.
Challenging the norm and willingness to adapt
The last 18 months have been anything but the norm and if there was ever a time to evaluate longstanding traditions these are the times to do it. In my role at The AF Group, it is important to give our Members all over the UK the best soil and crop advice and help ensure their crop production is as efficient as possible. For me that means giving advice on how to be as efficient as possible with their nutrition; particularly when prices are at these unprecedented levels.
Soil sampling not only makes sense but it is also a legal requirement and an integral part of agricultural funding for the future as subsidy payments begin to be phased out.
Artificial fertilisers are purchased to supply the extra plant nutrients crop require and that aren’t available in the soil. But sometimes I feel farmers can be guilty of using the same fertiliser mixes year-on-year and not basing their choice of inputs on plant requirements and soil reserves.
Carrying out soil tests and matching input requirements to the results is a steadfast way of not wasting money on expensive fertilisers that are not needed or taken up by the growing crop and end up washed away through the soil and into ground or surface water. One strategy we have followed at AF this summer has been identifying and recommending Members switch from their traditional ammonium nitrate fertilisers to protected urea fertilisers. This has given not only economic but also storage and, most importantly, environmental benefits.
Plan to stay ahead
Working out exact requirements and getting organised early is the best practice for ensuring optimum spend on inputs and getting at the front of the queue for available product in turbulent supply chains. This is beneficial for fertiliser but also across seed and chemical requirements and to make sure that your first-choice product is what you get.
So, my advice to our Members and others is that these times are different and it’s time for farmers to do things differently with fertiliser to stay productive and profitable.
Joachim, J. 2022. Farmers must challenge the norm and be willing to adapt as fertiliser prices soar. East Anglian Daily Times. 6 August, p.36.