Thu. Jan 20th, 2022

UK farmers are preparing for a fertilizer crisis in the spring after prices nearly tripled and supplies were reduced, with reduced nutrient use expected to affect the productivity of livestock, dairy, vegetable and some arable farmers .

Rising natural gas prices this year have led to rising costs for ammonium nitrate fertilizer, the main product used to boost crop growth, and to the temporary closure of UK manufacturing plants.

Matt Culley, chairman of the crop board at the National Farmers’ Union, said many farmers were reluctant to order fertilizer at high prices, which led to expectations of supply problems as the 2022 growing season began.

“We will soon run out of time. We’re going to have some massive logistical problems in the spring, even as farmers start [accepting] these higher prices, ”he said.

“Tightened logistics and tight supply chains will make it very difficult for farmers to get the fertilizer they need.”

Farmers have already cut back on chemical fertilizers to reduce their environmental footprint, by looking at alternatives such as manure.

But ammonium nitrate, which uses natural gas as a raw material, and alternatives, such as urea, remain crucial to the operations of most arable farmers, vegetable farmers and dairy and livestock farmers, who use the product to grow the grass on which their animals feed. .

Spot prices for standard ammonium nitrate fertilizers stood at £ 213 per tonne in October 2020 and reached £ 615 per tonne by December 2021, according to The Andersons Center, a farming consultant.

Prices for urea, another nitrogen-based product, and phosphate and potash fertilizers more than doubled over the same period.

“We are greatly affected by this industry,” says Julian Marks, group managing director at Barfoots of Botley, a vegetable business with an annual turnover of almost £ 200 million. “We do expect a return penalty.”

Barfoots reduced its growth area by 10 to 12 percent due to rising labor and input costs, while Marks said producers would cut fertilizer applied per hectare, which would hit yields further.

Culley said dairy and livestock farmers will be severely affected because most do not buy fertilizer in advance. “Generally, in the early spring, dairy and livestock farmers will see what grass they have available and see what fertilizer they need to buy to improve that grass,” he said.

“If things do not change, they will have to buy right at the top of the market and that will greatly reduce their margins.”

Rising wheat prices will compensate some arable farmers for the rising cost of fertilizer, says Michael Haverty, a partner at The Andersons Center, but it depends on the timing of their fertilizer orders. They are also facing rapidly rising fuel and labor costs.

James Peck, an arable farmer in Cambridgeshire, said high fertilizer prices had reduced his expected profit on the wheat crop by four-fifths. “If we get a drop in prices or a weather event to reduce returns, it’s a guaranteed loss year,” he said.

Culley said arable farmers will reduce fertilizer application, but added that many are considering lower-margin crops that do not require nitrogen, such as legumes or spring beans.

“We could face another year where wheat and grain production is lower than the year before,” he said.

The UK imports 60 per cent of its fertilizer needs, said Jo Gilbertson, head of fertilizers at the Agricultural Industries Confederation, a trade group. The only producer of ammonium nitrate in the UK, the American group CF Industries, closed its two plants in September because natural gas price increases made them unsustainable.

One, at Billingham, was reopened with state funding to enable the production of carbon dioxide, a by-product essential to the food industry. But CF’s deal with the British government ends in January, while the second plant, at Ince, has so far not reopened.

Deliveries of fertilizer to farmers in July to November were more than 10 percent below the five-year average, Gilbertson said.

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