The spiralling cost of farm inputs is set to continue through 2022, as surging oil and gas prices pile further pressure on farmer margins.

Crude oil quotes topped $110 a barrel this week and Europe’s wholesale gas price hit an all-time high of €193 per megawatt hour as Russia’s invasion of Ukraine continues to stoke massive uncertainty in energy and commodity markets.

This will be reflected in higher diesel and fertiliser prices, which are already running at more than double last year’s levels.

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Oil prices have continued to harden over the last few days as a global agreement to release crude reserves failed to calm fears about supply disruptions.

The lift in gas prices has been even more dramatic

Although the International Energy Agency (IEA) released 60m barrels of crude oil from its reserves in an effort to dampen the latest price surge, quotes for Brent crude oil reached $111 per barrel on Wednesday, the highest level since the summer of 2014.

The lift in gas prices has been even more dramatic, with quotes on the Dutch gas futures market breaking the €190 per megawatt hour barrier for the first time this week, after increasing by 50% in 24 hours amid fears around Russian supplies to Europe.

This latest hike in gas prices represents a major challenge to the fertiliser industry and for farmers.

The oil cartel Opec is expected to hold meetings this week to discuss production plans, but it is not expected to increase output

Fertiliser importers are already struggling to secure adequate supplies due to the impact of the Ukrainian conflict, and a 250% lift in commodity prices compared to spring 2021.

The latest hike in gas prices will further fuel fertiliser costs.

The oil cartel Opec is expected to hold meetings this week to discuss production plans, but it is not expected to increase output.

The shift in oil prices will be reflected in higher diesel charges for farmers and agri-sector contractors

However, buyers of Russian oil are facing difficulties regarding payments and vessel availability owing to sanctions.

The shift in oil prices will be reflected in higher diesel charges for farmers and agri-sector contractors.

Michael Moroney of the Association of Farm and Forestry Contractors in Ireland (FCI) pointed out that diesel prices have moved from 45c/l plus VAT last summer to 90c/l plus VAT this month.

He said this increase has pushed the raw diesel element of silage harvesting from around €16/ac to €32/ac. adding that this extra expense will have to be reflected in higher contractor charges this year.