Farmers need access to better data to predict fertiliser prices and make informed decisions over crops to ensure the country’s food security, one of the country’s leading agricultural bodies has argued.
Tom Bradshaw, deputy president of the National Farmers Union (NFU), told City A.M.: “It’s crucial the British farming industry has access to better market data so it can have a better handle of security of fertiliser supplies. This includes farmers having access to forward prices so they can better manage their costs, and better visibility on import volumes of fertiliser.”
As it stands, farmers utilise the Agriculture and Horticulture Development Board’s (AHDB) fertiliser price index, as the non-departmental government body provides spot prices for fertiliser – including distinctions for UK produced ammonium nitrate and imported sources.
However, the NFU argues it needs to provide more detailed futures prices – the costs for long-term contracts of fertiliser – and wants the government to compel suppliers to provide AHDB with the data to establish the data.
This would mean farmers could plan ahead more effectively regarding costs.
The request is particularly timely as there are currently concerns in supermarkets over shortages of a range of fruit and vegetables – in particular tomatoes, cucumber peppers and lettuce – which could be exacerbated if farmers opt against planting amid increasingly tight margins in the industry.
Bradshaw recognised fertiliser prices had fallen from record levels last summer in line with falling gas prices, but it had “come too late for many British farmers who have already bought their fertiliser for this year” and that “even with this drop in prices, the cost of fertiliser still remains significantly higher than farmers would normally expect to pay”.
Fertilisers prices spiked following Russia’s invasion of Ukraine last year due to high gas prices, as many fertilisers are made using gas either as an ingredient or in the manufacturing process.
While gas prices have fallen in the last few months, they are still three times higher than before the crisis.
For example, UK-produced ammonium nitrate was £234 per tonne in January 2020, reached a high of £841 per tonne in July 2022 and was still at £700 per tonne in January 2023.
The Energy and Climate Intelligence Unit has calculated that fertiliser costs are adding £78m to farmers’ monthly bills – meaning farmers could spend nearly a billion pounds this year on ammonium nitrate, urea and liquid urea, essential chemicals for agriculture.
When approached for comment, DEFRA confirmed that its Fertiliser Industry Taskforce – which includes the National Farmers Union and AHDB – meets regularly to discuss the impact of rising fertiliser prices.
It confirmed the government is looking to increase fertiliser price transparency as much as possible.
A spokesperson said: “We recognise the great work our farmers are doing to feed the nation against the backdrop of Putin’s illegal war in Ukraine and increased costs, such as fertiliser.
“We’ve taken significant action to support the sector, including bringing forward 50 per cent of the Basic Payment Scheme and going forward our new farming schemes will support farmers to produce food profitably and sustainably, including £600m in grants for equipment to help farmers become more productive.”