Fertilizer and Feed Price Hikes.
Global growth is driving an increase in demand for agricultural products, unfortunately for Irish farmers, Agri-input costs are also on the rise. The pinch of higher operating costs is being felt most significantly in the form of fertiliser and feed price hikes. An increase, fertiliser producers say, they are powerless to control. Let us take a closer look at what will this mean for Irish farmers and their operating costs for the remainder of 2021 and beyond.
The Central Statistics Office has highlighted a cost increase of 20% year-on-year in June 2021 for both fertiliser and energy costs, Calcium Ammonium Nitrate and Urea are the individual chemical components most responsible for the rising price of fertiliser as a whole. However, this data from the CSO does not quite tell the full story. For example, many who waited until last Autumn to purchase Calcium Ammonium Nitrate are actually facing an 80% increase in cost.
Market leading fertiliser producers (Saudi Basic Industries Corporation, KOCH Industries and others) are reporting that low stock levels and little-to-no growth in their supply chains as the primary drivers of these drastic price increases. In addition, the raw material costs of producing fertiliser have skyrocketed according to industry leaders, fueled by the ongoing Covid-19 Pandemic and global socioeconomic supply shock caused by the Ever Given’s blockage of the Suez Canal – the worst of which we are yet to feel globally.
Fertiliser production is unlikely to ramp up until well into 2022, the industry is still trying to regain the momentum lost over the past 18 months. While new production sites and facilities are due to come alive next year, Irish farmers will have to become accustomed to the higher fertiliser costs we are currently seeing until such a time producers can meet this newfound level of demand.
In addition to the rising costs of fertiliser, Irish farmers are also facing a 16% year-on-year increase in the cost of feed prices. Poor harvests in South America and France due to uncharacteristically poor weather throughout the regions in the early summer have contributed majorly to this price increase. In addition, astronomical global transport costs, again caused by the C-19 and the Suez Canal Blockage are also major contributing factors.
The EU’s Green Deal and Farm-to-Fork strategies, aim to reduce fertiliser use by 20% by 2030. Perhaps it is time for Irish farmers to begin looking to alternate sources of fertiliser, instead of simply buying the product from producers struggling to meet global demand, Irish farms have all the raw materials they need already to garner the same effect.
Slurry and manure make excellent, naturally occurring fertilisers when distributed properly. By ensuring adequate slurry storage is in place, coupled with the appropriate dispensary tools (dribble bars and trailing shoes - which maximise the nitrogen’s availability), Irish farmers will have reached a new level of sustainability and cost effectiveness, right when they may need it most.
