Hikes in input prices, principally nitrogen and potash, are likely to cancel out a significant proportion of the higher commodity prices seen in recent months and there is little sign of immediate let-up, according to speakers at the AICC conference (7-9 January).

Nitrogen prices started January well up on 2007 at around £260/t for 34.5% N (FW, 4 Jan), while potash prices (MOP) have doubled to around £290/t.

“A lot of these higher prices are demand driven, chiefly from emerging markets in Latin America, Asia and Africa,” said Jerry McHoul from Potash Ltd. “There are relatively few potash suppliers in the world market and the situation this year is that demand is one million tonnes higher than production. Everyone’s working at full capacity. It’s likely to be a few years before any big investment comes on stream.”

Serious flooding at two major mines in Canada and Russia over the past 18 months had not helped the situation and there was some concern that a 700m wide sink hole that appeared at the Russian mine could disrupt supplies further, he said.

Yara’s Mark Tucker agreed that supply and demand had become the biggest drivers of nitrogen fertiliser prices and were bigger factors than rising energy costs. “Brazil and the Asian block countries are dominating the market.” China, needs about 150m tonnes of product, which far outweighs the UK market at just 3.6-3.8mt, and India is a net importer of fertiliser, he said.

“Optimising nitrogen will be time well spent this season. Good efficiency of use will help reduce cost per unit produced and also be better for the environment.” Soil testing would have a valuable role in that, and he advised growers to get sampling dates booked now.

Tackling high fertiliser prices:

• Maximise N use efficiency
• Calibrate spreaders properly
• Accurately target N use to soil and crop needs – soil testing, precision mapping & application systems?
• Ensure other nutrients are sufficient, principally P, K, S and Mg
• Consider alternative fertiliser sources e.g. manures, sludge, compost