Farm Ireland
Independent.ie

Monday 23 July 2018

Fertiliser price hikes will cost farmers €36m

Tillage farmers most exposed as CAN and urea prices rise by €40/t to €70/t

Amazone’s ZA-TS hydro mounted fertiliser spreader.
Amazone’s ZA-TS hydro mounted fertiliser spreader.
Price hikes have been announced by all major fertiliser suppliers. Stock image

Louise Hogan and Claire Fox

A big hike in fertiliser prices this spring could cost farmers over €36m.

Price increases on all the main products have been announced by fertiliser suppliers, with the cost of CAN and urea up between €40/t to €70/t compared to last year.

The price increases will add between €3,500 and €4,000 to overall costs on a 100-cow dairy unit.

For hard-pressed tillage farmers the price hike could cost up to €4/t or close to €10m across the total harvest.

The total cost to the farm sector as a whole could top €36m, the IFA has claimed.

John Coughlan of the IFA Inputs Project Team said rising fertiliser prices will have a negative impact on farm incomes across the board as fertiliser is the second biggest expenditure for the majority of enterprises - excluding pigs and poultry.

"Cereal farms have the biggest exposure with fertiliser now accounting for 35-40pc of the variable production costs, while it accounts for approximately 17pc on dairy farms," said Mr Coughlan. "Based on the five-year average yield, rising fertiliser costs will push up the cost of grain production on index 1 soils by an estimated €3.50/t to €4/t," said Mr Coughlan.

He called on the EU Commission to take immediate action and abolish the imposition of anti-dumping duties on ammonium nitrate and customs tariffs on non-EU fertiliser imports.

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"Fertiliser is now costing Irish farmers over €500m annually.

Tariffs

"The combined impact of the duties and tariffs is costing Irish farmers in excess of €36m each year at a time when many sectors are experiencing an income crisis," added Mr Coughlan.

An IFA price survey shows that urea prices have jumped €50/t on 2017 and the product is now being quoted at €330/t, CAN is up €45/t to €245/t; 10-10-20 is up €25/t to €350/t, while 18-6-12 is €35/t dearer at €335/t.

But far steeper price increases have been reported by farmers and merchants around the country.

CAN was being quoted at €280/t to tillage farmers in eastern counties, urea at €370/t, 10-10-20 at €380/t and 18-6-12 at €350-360/t.

However, some farmers are hopeful that these quotes were the opening offers and prices may come back as the market settles.

Industry sources blamed the price hikes on tighter production controls by manufacturers over the last 12 months which has more closely matched supply to demand.

This has enabled manufacturers to push through price increases.

It is understood that many co-ops and merchants were caught off guard by price increases in the second half of last year.

It is estimated that up to 25pc of the farm market was supplied pre-Christmas in 2016-2017, compared to less than 10pc this season.

EU nitrogen manufacturers have taken the opportunity to raise CAN prices on the back of hardening global urea prices despite the fact that the main driver for nitrogen is the price of natural gas.

While manufacturers may attempt to push prices higher, trade analysts believe CAN prices have peaked.


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