The National Beef Association has called on fertiliser manufacturers to explain the 40-45 per cent rise in on-farm delivery prices over the past 12 months.
Earlier this year, the NBA warned members that the unexpected lift in grain prices could be followed by an equally sudden, but potentially much more damaging, rise in fertiliser prices as well.
This was because market movements over the last decade have shown that manufacturers tend to raise their prices in line with higher grain values - possibly because improved cereal incomes make more expensive fertiliser easier to accept.
“Unfortunately this forecast has proved correct even though all available evidence suggests that manufacturers’ stocks stand at a two year high and nothing on the market indicates that on-farm demand is outstripping fertiliser supply,” said the NBA’s Scottish vice-chairman, Jim Stewart.
According to NBA members, ammonia nitrate is now being delivered on farm at around £292 a tonne compared with about £200 in December 2009, the price of 20-5-5 compound is about £300 compared with £210, and 20-10-10 is being purchased for £320 when it was being delivered for around £230 exactly twelve months ago.
“These are astonishing increases and the leading manufacturers owe the agriculture industry an explanation. Feed wheat is currently trading at about £180 a tonne, up by about 80 per cent on last season’s prices, so cereal farmers could find higher fertiliser costs relatively easy to absorb,” said Mr Stewart.
“But this is not the case for beef farmers who are facing much higher grassland management costs at a time when the market return from their breeding and finished cattle is well short of covering the overall cost of production.”
“The Association fears current fertiliser prices will force some beef farmers to cut down on grassland inputs in 2011 – which will inevitably result in them having to keep grazing cattle for longer to sell at the same slaughter weight because pasture quality will deteriorate.”
“Similarly silage yields could also fall, which would be a disaster, because farm forage stocks are already at abnormally low levels, current poor winter conditions are piling on more pressure and maximum grass growth both at pasture, and silage field, level will be essential next summer.”
“Ultimately excessively inflated fertiliser prices will reduce cow fertility and future beef production because even the cheapest artificial plant nutrient is now priced beyond a typical beef farmer’s means.”
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