Fert Market Update: Managing the Price Spike

Tom Land, Fertiliser Technical Manager and Josh Pratt, Fertiliser Product Manager discuss mitigating risk and managing opportunity with fertiliser - how can we do that when input costs and output prices can be so changeable, combined with the challenges of growing a crop.

What is the current state of the fertiliser market, and how has it evolved?

Josh Pratt, Fertiliser Product Manager:
To understand where we stand today, it's essential to reflect on the past few years. Various drivers have influenced the fertiliser market, both globally and within the UK. Although Brexit initially had minimal direct impact, the loss of trade deals with certain countries started affecting supply. The most significant change began post-lockdown, with surging demand for products, including fertiliser.

The natural gas market, a crucial component in nitrogen production, saw price hikes that affected manufacturing costs. By summer 2021, European producers began cutting production or closing facilities, leading to substantial price increases.

What major changes have occurred in the last 12 months?

Josh Pratt:
In 2022, the Russian invasion of Ukraine and subsequent sanctions led to further disruptions. Reduced natural gas supply and high prices forced more plant shutdowns across Europe. Russia, a major supplier of nitrogen and potash, also faced sanctions that drove global prices up. Although phosphate prices in Europe rose, the market gradually adapted. Now, we’re experiencing a slight market correction, but there is still a lasting effect from the past two years, keeping prices supported.

What are traditional fertiliser purchasing habits, and how can they change?

Tom Land, Fertiliser Technical Manager:
Traditionally, the "June reset" marked the start of the new season, with farmers often purchasing large volumes at this time for the best prices. However, this approach is evolving. The financial benefits of buying early, while still present over a ten-year span, are diminishing. This has led to a more strategic approach where farmers spread purchases throughout the year, gaining flexibility and mitigating market risk.

How can farmers ensure they are buying the right fertiliser at the right time?

Tom Land:
Technology has significantly advanced precision farming. Using tools such as variable-rate nutrient applications and placement fertiliser technology, farmers can target nutrient application more effectively. This practice not only enhances efficiency but also reduces costs.

Savings of £20-£40 per hectare are possible with these targeted approaches. Understanding and using crop-specific data throughout the growing season allows for better decisions and increased yield optimisation.

What advice can help farmers improve their fertiliser use efficiency?

Josh Pratt:
Precision farming techniques, such as variable-rate and seed placement applications, have gained traction, especially with recent high fertiliser prices. By investing in these strategies, farmers maximize nutrient efficiency and reduce waste. With the recent price softening, there’s an opportunity to apply these methods during seeding periods and capitalise on nutrient availability.

How can growers make in-season adjustments to their nutritional strategy?

Tom Land:
Adapting plans mid-season is crucial for optimizing outcomes.

Utilising nitrogen use efficiency (NUE) calculations and grain nitrogen assessments helps identify if the crop is over- or under-supplied. This insight allows for timely adjustments. 

For example, with the current lower-than-average grain nitrogen levels due to weather conditions, farmers need to decide if additional nitrogen is necessary to achieve target protein levels.

Learn more about our Agrii-Start fertiliser range, including Agrii-Start Release - a unique phosphorus activator in soils.

 Agrii-Start Release increases the availability of other soil nutrients, prevents lock up and in turn increases the release of phosphate.