Introduction & Overview<\/strong><\/p>\n\n\n\n The cost of fertiliser in 2022 and in 2023 has created a substantial shock to farming systems in Ireland and internationally, with prices reaching unprecedented levels. While there has been increased commodity prices, the pattern is uneven. The dairy sector was well supported by milk price in 2022 but the outlook for 2023 is less clear. However, the increased cattle prices, although welcome, do not match the increases in input prices, particularly fertiliser. As ICSA has highlighted, the situation has most severely impacted the sheep sector where prices have actually been worse in late 2022 and early 2023 than in the previous year, and this is a matter which requires urgent attention.<\/p>\n\n\n\n ICSA is represented on the National Fodder and Food Security Committee where we have been monitoring the impact of high fertiliser prices. We understand that it is part of the green agenda to reduce fertiliser usage. This is a stated objective of the EU Green Deal, and it is encompassed in discussions on how to reach our emissions reduction targets under the Climate Action Plan. It is also clear from the focus on increased organic farming in the national CAP plan.<\/p>\n\n\n\n However, it must also be recognised that optimum fertiliser usage is vital to ensuring fodder and food security. Without adequate fertiliser, Irish farmers cannot fully utilise our competitive advantage in growing grass. Irish cereal yields are also among the best in the world, but this is also dependent on the availability of competitively priced fertilisers.<\/p>\n\n\n\n The cost of fertiliser has certainly impacted usage. In 2022, fertiliser usage declined about 25% compared to the average of the previous four years. Department figures presented to the Fodder and Food Security committee outline that 560,000 tons of fertiliser were brought into Ireland in January 2023 compared to 680,000 tons in the same period in 2022.<\/p>\n\n\n\n This reflects the price pressure, but it also reflects that fact that in January there was already a sense that price falls in international markets were not being passed back to farmers and that fertiliser suppliers were trying to maximise returns from stocks already in-situ.<\/p>\n\n\n\n So, while the extraordinary increase in fertiliser costs have ensured that farmers are now ultra careful about all factors in relation to soil fertility and soil health, it is vital that Irish farmers are not at a disadvantage compared to our competitors.<\/p>\n\n\n\n Causes<\/strong><\/p>\n\n\n\n Fertiliser price is linked to natural gas price.<\/p>\n\n\n\n On international markets, natural gas peaked in August 2023 at about US $9.75\/MMBtu (Million British Thermal Units) but then fell off that peak rapidly and has been trading below $2.40 since the beginning of 2023, which is below the average over the past ten years.<\/p>\n\n\n\n Initially, the war in Ukraine was blamed for a lot of the issues. But that is not the full story. Fertiliser price was edging upwards in 2021, and there was a notable spike in natural gas prices in the second half of 2021, with a peak of over US$6\/MMBtu. This then fell to almost half that level in January 2022, but the invasion of Ukraine was a catalyst for the major escalation in price in 2022.<\/p>\n\n\n\n The war was not only significant in terms of gas price but in terms of fertiliser supplies. Russia is the world\u2019s biggest supplier of fertiliser and second largest exporter of potash. ()<\/p>\n\n\n\n Since the EU first launched sanctions on Russia, exemptions were carved out for food and fertiliser. However, financial, and other sanctions have impacted the flow of fertiliser and ammonia needed to make fertiliser from Russia.<\/p>\n\n\n\n It would appear that while technically it is not prohibited, there are moral and other issues that prevent Russian fertiliser being traded. However, it is important to note that Europe has many other sources of fertiliser and sources include North Africa as well as European manufactured product. EU product was hit by peak natural gas prices, but that threat has now subsided.<\/p>\n\n\n\n In December 2022, the EU finally suspended import tariffs on nitrogen (6.5% on Urea; ammonia at 5.5%), with the exception of Russia and Belarus. This suspension is initially for six months so it should also help, in addition to the collapse in gas price.<\/p>\n\n\n\n However, none of this explains why Irish fertiliser price has been substantially higher in 2023 compared to our UK neighbours and why the collapse in natural gas prices and other factors has not translated into significantly lower prices here.<\/p>\n\n\n\n Disparity between UK and Ireland<\/strong><\/p>\n\n\n\n In regard to fertiliser price disparity, in January of this year we saw prices being extremely sticky in Ireland for the key products such as Urea and the compounds while prices were starting to fall significantly in the UK.<\/p>\n\n\n\n In early January it was not uncommon for our members to be quoted \u20ac950\/ton for Urea and higher and as the month progressed it slipped back to \u20ac900. While this was lower than the average Urea price for 2022 of \u20ac1,022 (CSO statistics) it was not following the price drops in the UK.<\/p>\n\n\n\n January 2023 UK price for granular Urea was STG\u00a3582\/ton (equates to \u20ac657\/ton). This was a 20% drop on the December UK price and more than 25% below the price typically paid by Irish farmers in January. The CSO estimates an average January 2023 price of \u20ac982\/ton. (See Table 1, page 5)<\/p>\n\n\n\n By March 2023, UK farmer price for Urea was down to STG\u00a3469\/ton (\u20ac529\/ton) whereas Irish farmers were still looking at \u20ac800-850\/ton at the start, although it gradually eased in March and early April and is now available at \u20ac650\/ton in Munster (Week beginning April 24). Protected Urea is trading around \u20ac720\/ton and 18:6:12 at about \u20ac720. Lower prices can be achieved closer to the border.<\/p>\n\n\n\n This reflects similar disparities between UK and ROI for other products such as compounds like 18:6:12 and 24:2.5:5.<\/p>\n\n\n\n Consequently, we have seen farmers try to get fertiliser from Northern Ireland. For most of 2023, there has been a disparity of \u20ac200-300\/ton.<\/p>\n\n\n\n Disparity Within Republic<\/strong><\/p>\n\n\n\n The much cheaper fertiliser in Northern Ireland has been a key factor in driving significant price differences between border counties and southern counties. The difference has been striking with Munster farmers paying more than \u20ac100\/ton more on average than farmers near the border where importing fertiliser is more feasible and cost effective.<\/p>\n\n\n\n However, there are also other factors at play. We have seen considerable variation in prices between various suppliers. This week, we have heard of a \u20ac100\/ton differential in the same county between a smaller scale merchant and a co-op.<\/p>\n\n\n\n <\/p>\n\n\n\n Table 1 Comparison of UK and Ireland Fertiliser Prices for Granular Urea and Muriate of Potash *<\/p>\n\n\n\n (Source: CSO for Ireland; AHDB For UK. ICSA estimated exchange rates see below)<\/p>\n\n\n\n Where to now?<\/strong><\/p>\n\n\n\n It has to be said that some Irish farmers bought fertiliser at the backend to have a stockpile in the event of fertiliser being scarce in 2023. This was widely rumoured with speculation that fertiliser would not be obtained in spring 2023.<\/p>\n\n\n\n The Minister has said that he does not intend to investigate what is going on in the fertiliser market. In our view, this is a cop-out.<\/p>\n\n\n\n We do not expect the Minister to set the price of fertiliser quite obviously but that is not a reason to reject transparency. Farmers should be entitled to know what is going on, in terms of margins, price gouging, unfair practices and what profits are being made.<\/p>\n\n\n\n This needs to be looked at in a national but also an international context and we should be pushing for the EU Commission to do more.<\/p>\n\n\n\n It has recently been reported that nine of the world\u2019s largest fertiliser companies are on target to make \u20ac57 billion in profits in 2022. This is not just an issue for farmers. It is a central issue on food affordability and for food security.<\/p>\n\n\n\n A key issue is why has fertiliser taken so long to come down in price. There are various explanations offered. One is that fertiliser was forward bought by co-ops and merchants at too high a price in order to ensure supply and that suppliers have been trying to recoup this.<\/p>\n\n\n\n But that begs the question why did Irish price go up so quickly last year? Some reports indicate that profits on fertiliser in Ireland went from \u20ac50\/ton to \u20ac250\/ton before reaching the farm gate. Farmers feel annoyed that they are being squeezed every way.<\/p>\n\n\n\n ICSA is also concerned that cattle and sheep farmers are especially vulnerable. Apart from beef and lamb prices, our members are complaining that special deals are available to dairy farmers from their co-ops.<\/p>\n\n\n\n We are aware that some dairy processors are incentivising farmers to use protected urea for sustainability reasons, but these incentives are via the milk cheque. Unfortunately, beef and lamb processors do not have the same policy and it means that cattle and sheep farmers are disadvantaged. We have also heard concerns from dairy farmers that incentives are tied to purchase from the co-op which needs to be looked at too.<\/p>\n\n\n\n Other Issues<\/strong><\/p>\n\n\n\n The National Fertiliser register was meant to be in place from January 1st. However, it was delayed under the Veterinary Medicinal Products, Medicated Feed and Fertilisers Regulation Bill 2023 which has now completed 3rd stage D\u00e1il Eireann. In our view, it is preferable that this does not now come into practice until 1st January 2024 because it is clear that there are too many problems with implementing it more than halfway through the fertiliser year. It is vital that there is no impediment to importing fertiliser from outside the jurisdiction. Price disparities this year have underlined this point.<\/p>\n\n\n\n The Minister has provided for a liming subsidy of \u20ac16\/ton this year for which applications recently closed. We welcome this. However, ICSA is concerned that Northern Ireland lime suppliers have not been approved. The Department says it is not possible but surely, we can use UK certification. The concern is that if we cannot source lime from Northern Ireland the value of the subsidy will be lost in excessive margins taken by suppliers. Competition is vital to deliver value for money.<\/p>\n\n\n\n It should be noted that there has been an enthusiastic response to the scheme by farmers and we understand that more than 25,000 farmers have applied. This gives lie to the false narrative that farmers are not committed to increased sustainability as well as efficiency.<\/p>\n\n\n\n However, it is now a concern that the \u20ac8 million marked for this scheme is woefully inadequate and this must be adjusted upwards in line with demand. Lime usage will increase farm emissions in the short-term but will optimise fertiliser benefits in the long-term and research shows that optimum pH soil is better at sequestering carbon.<\/p>\n\n\n\n ENDS<\/p>\n","protected":false},"excerpt":{"rendered":" ICSA Submission to the Joint Oireachtas Committee on Agriculture, Food and the Marine on the Disparity in Fertiliser Prices Introduction & Overview The cost of fertiliser in 2022 and in 2023 has created a substantial shock to farming systems in Ireland and internationally, with prices reaching unprecedented levels. While there has been increased commodity prices, […]<\/p>\n","protected":false},"author":2,"featured_media":8973,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"off","_et_pb_old_content":"","_et_gb_content_width":"","_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[13],"tags":[339,70],"yoast_head":"\nDate<\/strong><\/td> Urea \/ Tonne UK<\/strong><\/td> Urea\/Tonne Ireland<\/strong><\/td> MOP \/ Tonne UK<\/strong><\/td> MOP \/ Tonne Ireland<\/strong><\/td><\/tr> Jan-22<\/td> \u20ac909.60<\/td> \u20ac860.00<\/td> \u20ac650.40<\/td> \u20ac668.00<\/td><\/tr> Feb-22<\/td> \u20ac868.80<\/td> \u20ac939.00<\/td> \u20ac651.60<\/td> \u20ac738.00<\/td><\/tr> Mar-22<\/td> \u20ac841.12<\/td> \u20ac1,016.00<\/td> \u20ac751.20<\/td> \u20ac851.00<\/td><\/tr> Apr-22<\/td> \u20ac1,065.05<\/td> \u20ac1,157.00<\/td> \u20ac790.16<\/td> \u20ac868.00<\/td><\/tr> May-22<\/td> \u20ac916.11<\/td> \u20ac1,140.00<\/td> \u20ac799.11<\/td> \u20ac906.00<\/td><\/tr> Jun-22<\/td> \u20ac868.14<\/td> \u20ac1,059.00<\/td> \u20ac852.93<\/td> \u20ac883.00<\/td><\/tr> Jul-22<\/td> \u20ac880.28<\/td> \u20ac1,023.00<\/td> \u20ac903.88<\/td> \u20ac902.00<\/td><\/tr> Aug-22<\/td> \u20ac915.68<\/td> \u20ac1,015.00<\/td> \u20ac908.60<\/td> \u20ac912.00<\/td><\/tr> Sep-22<\/td> \u20ac984.96<\/td> \u20ac1,012.00<\/td> \u20ac868.68<\/td> \u20ac914.00<\/td><\/tr> Oct-22<\/td> \u20ac967.15<\/td> \u20ac1,016.00<\/td> \u20ac794.65<\/td> \u20ac944.00<\/td><\/tr> Nov-22<\/td> \u20ac906.20<\/td> \u20ac1,014.00<\/td> \u20ac749.80<\/td> \u20ac950.00<\/td><\/tr> Dec-22<\/td> \u20ac826.50<\/td> \u20ac1,000.00<\/td> \u20ac731.88<\/td> \u20ac944.00<\/td><\/tr> Jan-23<\/td> \u20ac657.66<\/td> \u20ac982.00<\/td> \u20ac725.46<\/td> \u20ac923.00<\/td><\/tr> Feb-23<\/td> \u20ac588.73<\/td> \u20ac905.00<\/td> \u20ac722.07<\/td> \u20ac874.00<\/td><\/tr> Mar-23<\/td> \u20ac529.97<\/td> <\/td> \u20ac713.03<\/td> <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n *All prices in Euro – calculated at the following exchange rates STG\u00a31=\u20ac)<\/td><\/tr> Month<\/strong><\/td> Exchange Rate<\/strong><\/td> <\/td><\/tr> Jan-22<\/td> 1.2<\/td> <\/td><\/tr> Feb-22<\/td> 1.2<\/td> <\/td><\/tr> Mar-22<\/td> 1.2<\/td> <\/td><\/tr> Apr-22<\/td> 1.19<\/td> <\/td><\/tr> May-22<\/td> 1.17<\/td> <\/td><\/tr> Jun-22<\/td> 1.17<\/td> <\/td><\/tr> Jul-22<\/td> 1.18<\/td> <\/td><\/tr> Aug-22<\/td> 1.18<\/td> <\/td><\/tr> Sep-22<\/td> 1.14<\/td> <\/td><\/tr> Oct-22<\/td> 1.15<\/td> <\/td><\/tr> Nov-22<\/td> 1.15<\/td> <\/td><\/tr> Dec-22<\/td> 1.14<\/td> <\/td><\/tr> Jan-23<\/td> 1.13<\/td> <\/td><\/tr> Feb-23<\/td> 1.13<\/td> <\/td><\/tr> Mar-23<\/td> 1.13<\/td> <\/td><\/tr> <\/td> <\/td> <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n