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Independent.ie

Monday 20 February 2017

Yet again the New Year springs hope of upturn

John Donworth

Published 05/01/2010 | 05:00

I began the first article of last year with the following few sentences: "A happy New Year to one and all. Good riddance to 2008.

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It was a tough year. High fertiliser prices, high fuel prices, falling milk prices and, lastly but not least, the bloody weather. Enough said."

The same could be said about 2009. We didn't think the weather could have been worse, but, as we all know, it was much worse. The high fertiliser prices were out there for the first few months of 2009 but, thankfully, they came back rapidly, with the exception of phosphorus and potash.

What will fertiliser prices be like as we approach the spring of this year? Thankfully, the omens look good for the spring.

While granular urea was costing €440/t last spring, this month it will be bought for around €300/t. This is for a minimum 8t load with a few months credit. At €300/t, each kilogramme of nitrogen is costing 69c. Last year, the same urea cost 94c/kg, so urea is nearly 32pc cheaper than last January.

Can it be bought cheaper? Last year, prilled urea was nearly €20/t cheaper. I presume this year it will be about €10/t cheaper. Did any of you use prilled urea last year and if you did were you happy with it? If you were happy with it last year, it makes no sense to switch back to using a dearer product this year. Milk price hasn't improved that much.

Explored

Also, several of you became very active in buying urea from across the border and some of this made its way very far south. Contacts made last year should be explored again this spring.

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What price is CAN likely to be? This spring CAN should be no dearer than €200/t. At this price each kilogramme costs 74c.

At that price, CAN is 13.5pc dearer than urea. Urea is approximately 90-95pc as efficient as CAN, so I would still recommend that you go with urea this spring.

Fertiliser prices are on the way up. New stock coming into importers' yards will be dearer than the stock it replaces. How much fertiliser prices increase is difficult to say, but we will not see the madness that prevailed during the last six months of 2008. If you have the capital, it's a good time to buy as much as you can at the moment.

While nitrogen prices are a good news story this spring, can the same be said for concentrate prices? With concentrate costs approaching 4c/l for the past two years, feed costs can have a major effect on farm profitability. Meal costs of 4c/l equate to €200/cow in a cow producing 5,000 litres. In a 50-cow herd that's €10,000.

Depending on your soil type, concentrate usage levels can move up or down depending on the weather. We don't need to be reminded again how last year proved this. But the good news for this year is that ration prices will be cheaper than they were in spring last year.

A decent 18pc crude protein concentrate will cost you around €205/t this spring. A 16pc one will be bought for €190/t. You may get better deals out there but any dairy ration you buy this spring should have an energy value (UFL) of 0.94 on a fresh weight basis. Ration usage was not a problem during the first rotation last year. Indeed, many farmers were under budget for ration use at the end of the second round. It was then that problems started.

Milk price is still very much on the floor as we enter this month. The cost-cutting and negotiating skills we learned last year, when milk was at 21c/l, should not be forgotten when the first price increases come this spring. Every euro should be fought for.

Irish Independent