Fertiliser prices up by as much as 25%
Farmers are facing big increases in fertiliser prices that may affect their production.
Fertiliser co-operative Ballance has notified farmers that some fertiliser products will increase in price by as much as $365 per tonne, or between 7% and 25%.
Jason Minkhorst, manager for sales at Ballance, said energy costs, export controls in China, and the continuing situation in Ukraine affected prices.
The company managed to keep prices down during autumn but needed to adjust them to align with rising costs.
About 70% of the mix of products in fertiliser was imported. The remaining 30% was manufactured locally, Minkhorst said.
Demand for fertiliser would be dependent on the price of milk, meat and cereals, and it was too soon to forecast the impact that price increases would have.
This was because the demand for fertiliser was strongly correlated with the demand for food, Minkhorst said. Ballance had reduced and then held prices to support farmers in the autumn to ensure there was feed for their animals.
It also decided to not increase nitrogen prices until the end of September to help farmers plan for their animal feed requirements this coming spring, Minkhorst said. The company’s 2021 annual report showed it sold 1553 million tonnes of fertiliser last year, and had a profit before tax of $63 million.
Waikato dairy farmer Pete Morgan said it was inevitable fertiliser prices would increase and there would be more increases to come.
He had already used farm management software to model how such high prices would affect his farm, and said farmers needed to model the impact of even higher prices and see how it would adapt to it and how they would manage feed budgets.
Farmers applied fertiliser to grass pasture or to crops that cattle or dairy cows ate. The better feed livestock had, the more milk or meat they produced.
None of the contributing factors to the price increases were going away soon, Morgan said.
It was not beyond the realm of possibility that prices would increase even further and farmers needed to model scenarios on how they would manage their farms in such a situation, Morgan said.
Kiwi farmers did have the benefit of producing something that the world wanted to consume, and the prices farmers were receiving for their products were good at the moment, Morgan said.
He said it should not be forgotten farmers were also at the mercy of the exchange rate, which could also increase.
Low fertiliser input farms should not be only regenerative or organic farms but could include more mainstream farms in future, Morgan said.