Fertiliser prices continue to surge to alarming and unprecedented levels. The best indicative price that the Irish Farmers Journal can report this week for CAN is €600/t.

To put that in context, CAN was regularly bought in 2020 for €180/t, and was available for about €280/t to €290/t as recently as this August.

Compounds like 10-10-20 are running around €900/t to €1,000/t, with urea about €850/t to €900/t.

At these fertiliser prices, grain prices would need to hit €240/t to €250/t to achieve breakeven. Some farmers regularly source fertiliser at this time of the year for use in the spring. They have been finding it difficult to source either product or prices.

The availability and cost of natural gas, required in the production of fertiliser, is a significant factor

Most merchants and co-ops that the Irish Farmers Journal contacted were unwilling to quote prices. There are reports of some farmers deciding to go ahead and secure supplies at very high prices, fearful that availability of fertiliser will be an issue alongside price in the early months of 2022.

Since China moved to close its borders for fertiliser exports last month, prices have escalated weekly.

Contributing factors include the closure of four fertiliser factories around Europe. The availability and cost of natural gas, required in the production of fertiliser, is a significant factor.

The European Commission said on Tuesday that it is examining whether illegal market manipulation of gas supply and prices is taking place. Even if natural gas prices drop, disruption has been caused to the supply chain already, production has been reduced and stocks are still likely to be affected.

Reaction

“It’s very clear now that the cost of fertiliser in 2022 is going to not alone wipe out any gains made through better output prices, but will actually burn all the way through those gains and out the other side into net losses,” said ICMSA president Pat McCormack.

“We’re also looking at cost surges in feed, energy and diesel.”