Fertiliser buying advice as Iran conflict squeezes supplies

Disruption in the Strait of Hormuz amid the US‑Iran conflict has stalled one-third of global urea trade, triggering pressure on UK fertiliser supplies.

The situation is fluid and volatile, and the message from suppliers to growers is simple: the longer you delay a purchasing decision, the more vulnerable you are to market forces and unexpected events.

See also: SFI26: What options are open to arable farmers?

Not surprisingly, nitrogen-based fertilisers have already gone up in price, as they naturally follow the oil and gas markets, explains Cindy McAulay of Origin Soil Nutrition, who stresses that the company is working flat out to fulfil orders and get products out to farms.

“There’s no need to panic if your order is already in the system,” she says.

“You may have to bear with us as there are some things that are outside of our control, so be prepared to wait a bit longer and take delivery when it’s offered.”

Being open-minded about product type and origin is also advised. “When there’s a geopolitical event such as this, our options reduce.

“But we still have raw materials and products coming through in our supply chains.”

For orders yet to be made, she recommends that growers liaise with their Facts-qualified adviser.

“There will be updates about product types and their availability so that plans can be made.

“Everyone is working to ensure continuity of supply in such uncertain times.”

Director of procurement at Origin Soil Nutrition, James Alcorn, explains that there are very few primary raw material manufacturers and, due to recent events, the company is having to go outside of Europe.

“It means our choices and options are fewer. Domestic producers in Europe will understandably concentrate on their own markets and sanctions mean that we are unable to accept any Russian material.”

Such a narrow supply chain means that market fluidity is required – something that doesn’t exist in such an uncertain situation with unknown timescales, he adds.

“We have developed long-term relationships with our suppliers and we are working closely with them. This is a global trade, and since the Ukraine conflict began, gas prices in Europe have gone up.”

That means fertiliser production in Europe has reduced, explains James, especially of nitrogen-based products. “Producers are in a tricky situation too, not just suppliers.”

Case Study: Ian Savage, MJ and JA Easey, Hoxne, Eye, Suffolk

Suffolk farm manager Ian Savage is relieved that he ordered all the fertiliser he needs last year, when prices were settled and supplies could be guaranteed.

With 851ha of cropping, he has already started with his early applications of nitrogen and sulphur, with oilseed rape being the first crop to benefit, followed by barley and then wheat.

Soil mineral nitrogen tests were done at the end of February, and Ian is hopeful that there will be a legacy of residual nitrogen left by last year’s dry spell and lower yields.

“Crops are certainly looking very green for this time of the year, so we will use the results to inform what we do, avoid over applying nitrogen and keep costs in check.”

He ordered most of his current fertiliser stock back in June, with the remainder arriving in November, once grain had been moved and he could store it.

“It means that we’ve got what we need for the crops in the ground all in the shed and we aren’t at the mercy of politicians or the markets.”

Autumn soil testing also informs his approach, with help from Alan Gray of Origin, who then uses the results to make sure than Ian receives a blended fertiliser matched to the soil analysis.

That avoids any over or under application of individual nutrients and allows specific issues to be addressed.

Margins around most fields mean that any risk to water from fertilisers is minimal, helped by a new fertiliser spreader with section control. Chickering Beck, which joins the River Waveney, runs through the farm, making its protection a key focus.

“Apart from our environmental responsibilities, fertiliser is a huge cost for a farm like this so we do everything we can to target it accurately.”

Ian switched to using protected urea after 2012, when an on-farm trial showed him that there was no difference compared with ammonium nitrate.

“It comes with a urease inhibitor already applied so we know that emissions are reduced, regardless of the weather. As a result, more of it gets into the plant.”

Milling wheat decisions

© Tim Scrivener

Ceres Rural agronomist Jock Willmott says if farmers have milling wheat in the ground, are on a fixed £20+/t premium and already have the nitrogen they need, then it’s business as usual.

“That later application, based on the previous fertiliser price, will cost you £6-7/t on an 8t/ha crop. It remains worth doing.”

Otherwise, growers who are a bit short of nitrogen might be able to cut back elsewhere in the rotation and “rob” any extra nitrogen they need, he suggests.

“This could be the year to pare back to 180kg/ha on first wheats. Most established well and have developed a good root structure, so will recover soil nitrogen more efficiently.”

Another option is to commit to buying the minimum amount of fertiliser required to get crops through to meet specification, as growers are obliged to supply a contracted crop.

“If you haven’t got it booked, the difficulty is knowing whether it will arrive in time or not.”

With no upward movement predicted on premiums and grain prices remaining subdued, growers on £15/t minimum terms have time to wait and see what unfolds, says Jock.

“If you’re not committed to supplying the crop, you may decide to push for yield rather than milling. Chasing that level of premium won’t appeal while the market is in such turmoil.”

Where there’s still around 80kg/ha of nitrogen plus the top-up to buy, it’s unlikely to be worth growing these crops for milling, he adds.

“The economics won’t work and the logistics aren’t promising either.”