Farmers turning to alternative growing methods in wake of sky-high fertiliser price
Fertiliser prices have risen sharply this year. (Trevor De Landgrafft)
In 12 months the price of commonly used fertilisers essential for Australia's $43 billion cropping industries has increased by as much as 230 per cent.
Key points:
- Fertiliser prices have risen an extraordinary amount over the past year
- An increase in energy costs is behind the price rise
- Australian grain growers are looking for alternative fertiliser options
Grain farmers looking to sow summer or winter crops are bracing for a massive increase in production costs and some are looking for alternative options to synthetic fertilisers.
Thomas Elder Markets commodity analyst Andrew Whitelaw recently analysed fertiliser prices and he was shocked by what his modelling revealed.
"If we look at urea and [diammonium phosphate], those prices this time last year were around about $400 to $550 a tonne landed in Australia," he said.
"Now we're talking, for both of them, above $1,400 a tonne.
"That's a remarkable rise. It's scary, because farmers have got a lot of decisions to make in the next three months."
A Rabobank graph shows the increase in input prices farmers are facing. (Source: CRU, AIP, Baiinfo, Rabobank 2021)
Rising cost of synthetic nitrogen
Mark Seymour, a veteran crop scientist specialising in pulses in Western Australia, said the rising cost of synthetic nitrogen could lead to farmers investigating whether a pasture or pulse crop could fit into their systems to naturally fix nitrogen into the soil.
"No one thing will fit everyone," he said.
"Some people may just reduce their inputs and grow the same enterprise; there's talk of more fallow in the areas that do fallow well and for the areas that do legume relatively well, you might expect more go into those and reduce inputs into the legume phase.
"I think there is more scope for further legume grain crops as well, so it will be interesting to see how people react."
Wheat and other grains will cost more to grow next season due to fertiliser price increases. (ABC Rural: Jo Prendergast)
For Mark Roberts who farms at Cascade, about 100 kilometres north west of Esperance, grazing pulses make up 20 per cent of his land use.
The mix of woolly pod vetch and serradella helped not only feed his flock of sheep, but also added valuable organic nitrogen to his soils for following with canola or cereal crops.
He estimated his paddocks, which were planted to vetch then wheat saved him about $250 per hectare when compared to a paddock that was planted to wheat after canola and therefore needed additional synthetic nitrogen.
"Definitely I see the leading croppers adopting a legume into their system, but it's just finding the right legume for your system," he said.
Mark Roberts from Cascade in WA plants pasture species like vetch to feed his sheep. (ABC Rural; Tara De Landgrafft )
Reducing fertiliser rates
Murdoch University professor John Howieson said legumes were key to reducing fertiliser bills and increasing overall profit.
He said a new variety of pink serradella called Fran2o was proving particularly good at organically fixing nitrogen in a range of soils.
"I'm excited because it's so well adapted to the Wheatbelt conditions," he said.
Professor Howieson said data from 40 experiments over the past four or five years showed cereals grown after seredallas, such asFran2o or Margurita, were able to access significant quantities of fixed organic nitrogen from the soil, so much so the cereals did not respond to added synthetic nitrogen.
Seeding time will be more expensive this year for grain growers due to increased fertiliser prices. (ABC Rural: Jo Prendergast)
A Grains Research and Development Corporation (GRDC) project is assessing the economics of how the changing phosphorous price altered the optimal rate of application for maximum net return in wheat production.
Researcher Craig Scanlan said so far the study had found the greatest influence on the optimal application rate for P fertiliser was the yield response in tonnes per hectare.
"What we also found was the range of rates that achieved the same net return was quite wide at all sites," he said.
Mr Scanlan urged farmers to use soil test data and plan the most profitable rates for their paddocks.
Cascade farmer Mark Roberts uses vetch pasture to feed stock and boost organic nitrogen before a cropping phase. (ABC Rural; Tara De Landgrafft )
Prices to remain high
Analyst Andrew Whitelaw said the huge price hikes in fertiliser all boiled down to one factor: high energy costs.
"Synthetic fertilisers are made using energy," he said.
"In Europe it's generally natural gas, in China it's coal and what we're seeing is those [coal] prices have gone just absolutely through the roof.
"I just don't see it [fertiliser prices] falling massively. We don't see it getting back into the A$800 or less mark, by the time we have to buy. We're liable to have high prices for Australia right through to our seeding period."
Andrew Whitelaw from Thomas Elders Markets says fertiliser prices have climbed an extraordinary amount. (ABC News)