The weather has been really nice here for the past few weeks. Very little rain and decent enough temperatures for the time of year. Land has started to seep nicely and is almost in a trafficable state.

I wonder will things be as good come 1 February when everyone is mad looking to get slurry out?

You can just see that little stretch in the evening starting to happen, which is always nice. I love the anticipation of spring and summer and the thoughts of getting back out to some field work.

Taking the shine off

The thoughts of paying for fertiliser is taking the shine off it a little this year, but how and ever, there’s not much can be done about that.

I tuned in with interest to last Thursday night's Irish Farmer's Association input price challenges meeting.

Grassland Agro CEO Liam Woulfe gave a very interesting, albeit depressing, presentation on fertiliser supply and price outlook for this spring and how his company is progressing through this difficult time.

The price of gas has come back, but it is still five times the price it was this time last year

Every farmer in the country is talking about the price of gas, everyone’s aware that it has come back in price recently and are wondering if that means that fertiliser is going to come back in price.

This time last year, natural gas was costing around $16/mega watt hour (MWH). It increased to around $90/MWH before Christmas and fell back to around $78/MWH in the last few weeks.

So, yes, the price of gas has come back, but it is still five times the price it was this time last year. The price of gas, of course, is just one part of the puzzle that makes up the perfect storm.

Supply limitations

Supply limitations of raw material is another that I won’t go into, but things that sometimes get forgotten are the cost of shipping has increased by over 300% and even getting a ship on a particular route is sometime proving impossible no matter what the cost.

Packaging has increased by 30% to 40%, pallets have increased by 60% and transport is up 10%.

Currency exchange rates are another factor compounding the problem. Believe it or not, the price of fertiliser on the world market was more expensive in 2008 than it is now.

But in 2008 the US dollar (in which fertiliser is traded) to euro exchange rate was $1.58:€1, meaning that $800 = €506. Today, the exchange rate is $1.13:€1 meaning that $800 = €708.

Perfect storm

These issues, coupled with the fact that European nitrogen inventories were 30% lower in autumn 2021 compared with 2020 and 2019 to begin with, are, as I’ve already said, creating the perfect storm and driving the price to the farmer completely through the roof.

The European Union, through all its faults, has always done a reasonable job in delivering food security within its borders.

But speaking as someone who doesn’t know a lot about it, it would seem it has done a fairly poor job it protecting itself from the huge volatility we are now seeing in the energy markets.

In reality, the high price of fertiliser to the farmer will ultimately affect production rates as farmers try to get away with using less.

Less production could in theory affect food security and availability down the line. Let’s hope it won’t come to that.

Sustainability is a great buzz word these days and has been for quite some time, but if fertiliser was to stay at the price it is for any more than this year, then a lot of the farming systems in Ireland will just not be sustainable.