A sub-group of the National Fodder and Food Security Committee was convened on Wednesday 12th October to provide a forum to discuss potential challenges around the fertiliser supply chain facing into the peak season of fertiliser demand on farms in the coming spring. Relevant stakeholders attended the meeting from across the fertiliser wholesale and agri-retail sectors and from farm organisations.
The meeting also included representatives from the Department of Agriculture, Food and the Marine, agri-finance, agri-media and Teagasc.
In his opening remarks to the meeting, Mike Magan, Chair of the Fodder and Food Security Committee said: “The meeting is being held to provide a forum to discuss and understand the potential risks of disruption to the fertiliser supply chain in the coming months and into the peak fertiliser usage period in spring and early summer of 2023. We want to ensure that we don’t have a situation where a farmer needing to apply fertiliser next year will not be able to source it.”
The meeting came to agreement on a number of key awareness messages that require to be communicated to farmers and industry to mitigate the potential risk of fertiliser shortages:
The Department of Agriculture, Food and the Marine informed the meeting that although all the sales data is not yet collated for 2022, the trend observed in quarter 3 continues with total fertiliser sales expected to be approximately 20% lower than 2021. Sales of Nitrogen (N) are showing a decrease of approximately 20% with the decrease in Phosphorus (P) and Potassium (K) lower at approximately 30% when compared with 2021. An EU Fertiliser Strategy is also under discussion at present where policy coherence across a number of areas including energy, fertiliser and food security is anticipated.
Input to the meeting from fertiliser wholesalers highlighted the relatively small scale of Ireland’s fertiliser usage, being less than 0.5% of the overall global usage, thus making Ireland very vulnerable to global factors in securing fertiliser supply. Prices of nitrogen fertiliser continue to remain high due to the dependence and price of energy, particularly gas. Availability of fertilisers is affected by restricted access to products that are linked to sanctioned Russian oligarchs and the supply risk is particularly acute in the case of P fertilisers, as approximately 70% of P used in Ireland was from Russian-associated companies. The importance of having imports coming into the country from now on in order to ensure sufficient stocks are ready for usage on farms next spring was highlighted. However, confidence around importing large quantities is low at present due to the lack of significant demand for product coming through from farm and agri-retail levels. Any delay in imports now has the potential of knock-on impacts on availability during the peak fertiliser usage period in the months of March and April.
Representatives from across the agri-retail trade (agri-cooperatives and merchants) highlighted that there has been some forward buying of fertiliser at farm-level in advance of 2023. However, this has not been widespread and has tailed off in recent weeks. While fertiliser stocks are available to meet demand currently, the level of stock held in Ireland has now dropped to below normal levels for this time of year. The additional risk associated with high value transactions was also increasing the need for commitments on pricing and shorter payment timelines. Some individual retailers are exploring and have implemented initiatives to help facilitate fertiliser purchase options for farmers.
Input across the farm organisations consistently highlighted the issues faced by farmers, particularly around having to absorb risk through committing to purchases at high prices and with short payment terms. The issue is particularly acute on farms where cash flow is irregular across the year. The importance of any EU policy initiatives prioritising European and global food security was emphasised. Concerns around declining fertiliser use and knock-on impacts on soil fertility levels and productive capacity were voiced.
In summing up the meeting, Chairman of the committee, Mike Magan thanked the forum for the positive input from all stakeholders, and stressed the importance of the collective effort and shared responsibility required across the industry to help mitigate against any potential supply issues. In particular, the continued engagement across the supply chain to minimise and share risks, including the development of workable supply and financing arrangements will be very beneficial.