Should I Buy Fertiliser Yet? – Ian Browne (Stafford) 

Definitely.  The nasty hike in gas prices has caught everybody unawares.  Questions are being asked by arable men as to whether they should sow crops now and some livestock men are saying fertiliser is too expensive and they will do without …!!!

I believe both are badly wrong.  If less crop is sown, then next harvest tonnage will be down next summer, and the prices will logically rise.  What is important is that if you grow crops, they must be looked after properly to help them achieve their potential.  We will then have to hope prices rise as the growing costs are going to be increased by maybe a potential 50% hike in fertiliser prices (up say £35 / acre year on year or £10 – £12 / tonne grown).  Be careful however to “feed” the crop for its realistic potential not “hoped for” yields.  Also possibly do not sow poor areas of land that do not crop well; be realistic!

As regards grassland areas, we know fertiliser is important in the early season in terms of getting grass going and also gives some of the best returns in terms of grass DM production per kg of N applied.  Later in the season responses do tend to fall off but when used sensibly, can still give a very positive return.  What is essential is to ensure you apply the correct dosage and spread evenly i.e., do not waste the product.  If a farm carries on the way it would normally, then we can expect grassland prices to rise by maybe 50% or up to maybe £50 / acre.  While this is dramatic, in the scheme of things on a 300-acre farm this may amount to £12,500 to £15,000.   If we do not produce enough grass growth, grazing and silage production may be significantly down, which can have a far more profound impact on the overall farm output and profits.  If concentrate were to cost ~ £270 / t fresh or £305 /t DM, we can then see the fertiliser price hike is the equivalent of 41 tonnes DM (46.5 tonnes fresh weight cake).  If we lose let’s say 41 tonnes DM (but this could be very considerably more!) then we would effectively have to reduce cow numbers by about 8-10 cows so dropping production by maybe 80,000 litres.  What will this do to your profits?

The worry is that if people panic now, they could make significant negative impacts on their businesses as action that is taken in haste and not planned out properly can be very damaging.  Yes, the costs have risen dramatically by maybe £12 / tonne of corn produced or by 0.75 p/l of milk.  This has occurred in the past with other cost areas, and we have survived.  In terms of overall costs, it is maybe a 3% to 6% increase; not the end of the world.  If you were moving to organic, you would take several years to achieve it and would have a large decrease in production while hoping higher prices make up for that.  Panic will not achieve this overnight.

Two other considerations needed to be factored in.  Delivery / transport issues will have a major impact on getting fertiliser onto farms.  By ordering now, the chances are that you will have fertiliser to start seasonal applications in early spring.  Those that wait hoping prices will fall could be in for a real shock in terms of delivery dates and actually being able to get supplies if fertiliser production ceases for any length of time.  Secondly, there is unlikely to be any significant reduction in gas prices before next June so waiting is a mugs game.

This is a year for careful planning and budgeting.  You should not alter your business on a whim unless the carefully planned process shows that it is sensible.  This is a year for “Steady as she goes”.  Contact Ian at ianbrowne@fcgagric.com or your local FCG Office, to put these price hikes in perspective for your business.