Call me an old sceptic, but the recent rise in the price of fertilisers seems to have followed the surge in grain prices with unseemly haste. As stated in my latest blog posting, there does seem to be a highly suspicious link between the two markets, even though the factors driving each are not even closely related....

phil clarke:

Call me an old sceptic,

 You old sceptic. However don't despair a sceptic is one who shows a concern for truth, unlike the cynic whose mind is made up. Or the naive who doesn't evaluate inputs.

The old saying about farmers springs to mind, buy retail, sell wholesale!!

Next watch the price of a loaf of bread shoot up by about 30 to 50 pence because of "the unprecedented rise in the price of wheat" (even though the wheat content of the loaf has only gone up by 5 to 6 pence). It won't of course come back down again when the wheat price crashes next May! (It didn't last time!)

boveyfarmer:

The old saying about farmers springs to mind, buy retail, sell wholesale!!

And pay for the transport both ways! Wasn't it Rosevelt that said that?

Kennedy? 

    I think your Blogg is absolutely right, Phil, I have always reckoned that fertiliser prices follow the grain price. I think this scenario goes back well beyond the 1990's. I also agree with your reasoning. 

     At least with seeds and feed we have plenty of evidence to argue unfair prices but with fertiliser and sprays I think it is a question of charge what the market can or will pay. These suppliers know there "Gross Margins" and "rates of return" and can take their prices up to the limit which the grower can pay.

    I wonder how the price of fertiliser in the drought hit regions of Russia, or elsewhere for that matter, will compare with last year's.

And spare a thought for livestock farmers who have no grain to sell but still have to buy fertilizer for grass production - and have to buy in grain for feed. 

Yes, yes. I am waiting for the organic men to have a go now but they won't feed an ever increasing population. Here goes, where's my tin helmet?

Could have bought fert early. Could have bought fert late.

Could have sold wheat early. Could be selling wheat now.

Could have bought feed early. Could have still got feed to buy.

Can buy spray in advance. Can buy it on the day.

Could pay a fortune for straw. Could look at alternatives.

Could have booked seed wheat early. Could be scratting around for it now.

Blah blah blah. Sorry chaps but there are plenty of mechanisms for agreeing prices beyond dealing on the day which may suit different situations. If your sole way of buying inputs or selling outputs is "I'll hope its a good price on the day" then more fool you.

    This is the first year I can remember, for a while, when my merchant has not been on the phone since June asking about my fertiliser requirements for next year and for early purchase/delivery commitments.

Granular urea £270/t. Could have had it for £218/t 2 months ago.

Still, I'd probably be happier paying the high fert price and selling wheat today than buying cheap fert but selling wheat 2 months ago.

All swings and roundabouts isnt it?

Latest AN retail prices from GrowHow/ Yara are £250/t for October - that's a £30/t increase on September! Apparently it's all due to the massive demand for fertiliser and tight global supply....although I'm sure Mr Clarke's scepticism levels will be rising!

 http://www.fwi.co.uk/Articles/2010/09/01/123104/october-fertiliser-prices-jump-by-30t.html

Fertiliser suppliers have denied accusations they are profiteering...

Good job the drought early on ,curtailed fert spreading, we have enough left for half of next year

Tim.Relf:

Fertiliser suppliers have denied accusations they are profiteering...

 

Well, they would, wouldn't they, to paraphrase Mandy Rice-Davis (probably before your time, Tim....).