fertilisation field

 Ammonium nitrate is selling at £925 per tonne, four times more than iin 2020

Already struggling UK farmers and growers face having to pay as much as 182% more for their fertiliser this year due to the impact of the Ukraine crisis, according to analysis from think tank the Energy and Climate Intelligence Unit.

The not-for-profit organisation’s report Farming, Fertiliser and Fossil Fuels, published today, put the potential total cost of fertiliser for the sector over the next 12 months at £1.18bn.

This was £760m higher than last year’s bill, which had itself risen by £160m on 2020 levels due to the impact soaring energy prices had on fertiliser production.

Because fuel prices were at even higher levels this year – with red diesel averaging at 76.9p per litre at the end of February, compared with 56.2p per litre at the same point in 2021 – the conflict in Ukraine would doubtless exacerbate existing supply issues, the ECIU suggested.

These energy costs – which had risen even further through March – had led fertilisers such as ammonium nitrate to hit prices in the region of £925/tonne, it added, citing evidence from commodity brokers. This represented a fourfold increase on 2020 average prices.

However, such soaring inflation may ultimately lead some farmers “to cut both the purchase and application of fertilisers in response, in order to reduce costs as much as possible”, the report suggested.

And as previously reported by The Grocer, some farmers who were already struggling with the ongoing labour crisis had already decided to forego some planting to cover more immediate bills.

UK growers were already facing rising costs and an “administrative nightmare” due to a 38% hike in the seasonal worker minimum wage from April, announced by the Home Office in February.

Meanwhile, The Grocer has also heard of some desperate farmers looking to sell off some of their stores of fertiliser in recognition of the soaring cost of the input.

“On top of Russian sabre-rattling around fertiliser supplies, farmers find themselves on the end of a fossil fuel double whammy, with higher costs of both fertiliser and energy due to the oil and gas crises,” said Matt Williams, climate and land programme lead at the ECIU.

“This is compounded by recent extreme weather hurting potato, wheat and orchard harvests in the UK,” he added, calling for more support for British businesses to offer viable and lower-carbon alternatives to imported fertilisers.

“We need to think about fertiliser and food security,” he added. “Clean, net zero, home-grown solutions exist, but those British agritech companies leading the way must be given a boost if we’re going to insulate both British farmers and the British shopping basket as best we can from oil and gas price spikes and the aggression of rogue leaders like Putin. 

Fay Jones, MP and chair of the All Party Parliamentary Group on Farming, said: “For many farmers this is making a bad situation even worse, hitting them in the pocket, while these fertilisers made from fossil fuels continue to drive climate change. 

“Many framers have been working to find ways to reduce their carbon footprint, but they need more help decarbonising, cutting their use of fossil fuels, and reducing use of fertilisers where possible.”