The lengthening days, the end of the slurry spreading ban and dwindling feed stocks all point towards spring around the corner. A new season beckons and a time when a key consideration for many farmers is the purchase of fertiliser to kick start the new growth and drive maximum production from the land. Hopefully this purchase will be guided by soil analysis and a detailed fertiliser plan to ensure the best possible return from the investment in fertiliser. The selection of products with the balance of nutrients to complement the manures applied and to meet precisely the needs of the growing crop is essential and with timely application will ensure the best possible response.

The fertiliser purchase represents a significant blip in the cash flow of the farm business and often requires a degree of financial planning. Many farmers and fertiliser distributors will have watched the falling oil prices over recent months in the hope that fertiliser prices would reflect the global fall in energy costs. The reality is that the market for natural gas, which is the key component in nitrogen fertiliser production, has been much slower to follow the fall in oil prices and would likely need to experience more downward pressure for nitrogen fertiliser prices to fall significantly as a result.

Spreading Fertiliser
Spreading Fertiliser

It would look as if supply/demand dynamics have taken over and are driving an upward trend that will confound any hopes of cheaper fertiliser in the short term. The emergence of Brazil as a major buyer of CAN (calcium ammonium nitrate) following the introduction of laws restricting the use of AN (ammonium nitrate) in that country is impacting on the global nitrogen market. Brazil’s fertiliser consumption is almost equivalent to the whole of Europe and with limited sources of CAN available throughout the world the effect of this new demand will be particularly felt in areas such as Ireland which are also CAN dependent. 

The struggle to keep up with the growing demand for nitrogen has been exacerbated by urea supply problems in the Middle East, with Egyptian granular urea production running at 60 per cent capacity due to gas supply shortages. Similarly, phosphate and potash prices are also firm, with logistic and mining issues keeping supply and demand finely balanced and not really offering any reductions which would work through to lower NPK prices. Currency is  the other major variable in commodity markets with the strength of the US dollar and the weakness of the euro (the principle currencies for fertiliser trade) driving up prices for European buyers.

Unfortunately Ireland, with no native fertiliser production has no protection against this type of volatility and every shipment has to be sourced from the global marketplace and in competition with all the main agricultural regions.

However there are few investments on the farm which can produce as good a return on investment as fertiliser applied in the early spring. The main challenge, as always at this time of the year, will be for the suppliers to get all their orders delivered on time.