Farmers are turning towards New Zealand-made fertiliser as Ravensdown and Ballance Agri Nutrients report soaring price increases.
File image. Photo: 123RF
Ballance general manager of sales Jason Minkhorst said the price of DAP fertiliser had doubled in the last year and while the company absorbed some of the cost, the price farmers paid had gone up by about 55 percent.
"Several things are pushing up the prices, to describe it as Covid is to simple, there's increased demand for food and particularly for meat and dairy products and a key input to producing food is obviously fertiliser," Minkhorst said.
"Another driver is that Chinese factories and most fertiliser comes from China, have been told to focus on the domestic market to assure food security for China. And then the last driver is this seasonal purchasing supported by subsidies in countries like India and Brazil that's also putting pressure on prices at the moment."
Prices of locally manufactured products have only gone up by 10 percent so more farmers are turning towards locally made products.
"Farmers are buying less product due to the price increases as well, I think part of it is that farmers always just use what they need in terms of fertiliser and they're using less for sustainability reasons.
"The sustainability reasons are probably having more of an impact as they change their on farm practices for freshwater policy.
Ravensdown supply chain general manager Mike Whitty said fertiliser and freight prices had been low for the last couple of years and now they were catching up.
In the last year the price Ravensdown paid for diammonum phosphate had gone up 85 percent, urea had increased by 95 percent and potash - a component for fertiliser - had increased by 120 percent, Whitty said.
"Everybody is always concerned when there are substantial increases in prices, that then can flow on to budgetary constraints and therefore impacts on what they can purchase.
"I suppose the positive is generally produce prices for what farmers are selling have been positive, and again when you look at these fertiliser commodities, they are a typical commodity and do go up and down, and they tend to be relatively volatile over time."
In the last year the price to hire a bulk vessel has risen by 300 percent and the price of fuel had gone up by 175 percent - both contributing to higher prices for fertiliser, Whitty said.