There is unlikely to be a drop in fertiliser prices before the spring and concerns are growing about the availability of supply, a leading market analyst has said.
Dan Basse from Chicago-headquartered research firm AgResource said the unprecedented lift in fertiliser prices over recent weeks was due to rising global energy markets.
“I don’t see any change in world energy, and I don’t see any change in world fertiliser prices. Unfortunately, they are going to stay high all the way into next spring,” he said.
Speaking at an event organised by grain traders Barnett-Hall, Basse raised concerns that fertiliser supplies in the USA and Europe could run short next year.
We have not seen this sharp rally in fertiliser and lack of availability
“China and now Russia are really withholding their fertilisers for their own farmers which will leave spot shortages in some countries around the world,” he warned.
“We have not seen this sharp rally in fertiliser and lack of availability [before]. Even in 2011, when fertiliser prices rallied sharply, we had availability. This year, the availability may not be there,” Basse added.
The latest price listings from suppliers in NI has straight nitrogen (CAN) at around £600/t, which is three times what local farmers were paying a year ago.
A reduction in concentrate feed costs for local livestock farmers also appears unlikely this winter, with Basse expecting global grain markets to generally stay strong over the coming months.
The market analyst said China was now importing record amounts of maize as it rebuilds its pig sector following a devastating outbreak of African Swine Fever in 2019.
The other new demand driver in the global grain trade is the rollout of renewable diesel in the US
“China imported one in every four metric tonnes traded in the world feed grain sector last year. That is a big deal,” Basse said.
The other new demand driver in the global grain trade is the rollout of renewable diesel in the US. The new fuel, which is similar to biodiesel, is now mandated for use in heavy goods vehicles in several western states.
However, soya markets are looking much less upbeat over coming months, with Basse expecting significant exports to come out of Argentina next spring.
“Don’t buy meal too far ahead unless you see a South American weather problem,” he told representatives from the local feed trade.
Meat and dairy
While costs for local livestock farmers are forecast to remain high, there is a positive outlook from AgResource for global meat and dairy markets over the coming months.
The only market that hasn’t risen to the same degree is dairy
“World meat prices are up 40% from where we were last year. The only market that hasn’t risen to the same degree is dairy,” Basse said.
“We believe that, because cow numbers are declining in the EU, USA and New Zealand in the year ahead, dairy markets look robust as we head into 2022,” he added.