The ECIU (Energy and Climate Intelligence Unit) is predicting a tough 2023 for farmers in Britain. They believe that sky high fertiliser prices could mean hundreds of millions of extra costs. It could have a serious impact on the industry and food security in the UK.
What are they predicting?
A previous analysis from ECIU found that British farmers spent £760m extra on fertilisers in 2021 and 2022. This was specifically on nitrogen and phosphate products that are made using gas.
The ECIU’s latest estimations are that this figure will be £628m in 2023. In the period from 2021-2024 they could be paying as much as £1.1bn more than standard prices.
What is the cause?
The reason fertiliser prices are at such incredibly high levels is the price of gas. As it became more costly, the price of fertilisers that use it took off. Some products require a lot of energy to make, so producers can consume a lot of gas and hence the high costs. Some products also feature it is an ingredient, making the prices even higher.
The gas prices hit a peak in March-May 2022 due to the invasion of Ukraine by Russia. They then fell in the summer of 2022. Now, estimates are claiming they could come down by 30% in 2023 and a further 20% in 2024.
However, although gas prices have fallen, fertilisers have not come down in value yet. In fact, there has been very little change from late 2022. They remain near to the historic high.
The issue farmers are facing is worsened because agencies of the UK Government are already warning to expect a hot summer. It is likely there will be a repeat of the drought conditions from last year. When that happens, farmers often need more fertiliser to ensure an adequate nutrient supply and make efficient use of water.
Calls for transparency
In the summer of 2022 the National Farmers’ Union (NFU) said there was no confidence among growers in the UK. They had big concerns about input prices because there is a lack of transparency with the price of fertilisers.
The NFU has been urging the Government and fertiliser industry to be more transparent here. They want the publication of prices to be more immediate so that businesses can plan ahead for future crops and costs.
Speak to us if you need fertiliser
At JS Hubbuck Ltd we understand the pressure farmers in the UK have to deal with, especially when prices for such vital products are so high. We try our best here by offering pricing info when we have it. Plus, we can offer ideas and tips on how to ease high costs.
So, if you need any help with fertiliser, whether it is purchasing or using it effectively, speak to us. We are happy to support clients and always deliver a friendly service.