Fertiliser prices could be set for further falls in the coming months, with demand still being affected by farm returns.
Many farmers have struggled to buy supplies in recent months with cashflow restricted by low prices across arable and livestock sectors and delays in Basic Payment Scheme payments.
Fertiliser values have fallen during the past year, with 34.5 per cent N ammonium nitrate back about £49/tonne to £225-233/tonne in the year to January. Gleadell fertiliser manager Calum Findlay said there had been some increased fertiliser demand in Europe in recent weeks.
But Clarke Willis, chief executive of Anglia Farmers, said prices would come back further.
“The challenge with fertiliser is, although summer and autumn prices are going to be below where we are now, it will not necessarily reflect some of the raw material costs,” he said.
This was a theme underlined by Guy Gagen, NFU chief arable adviser.
He said the view of some arable farmers was fertiliser was still unaffordable for many.
“[UK prices] are way adrift and fertiliser is way too high,” he said. “Really, the price is driven by what the manufacturers believe the market will bear,” he said.
Mr Gagen said arable profitability and lack of farm cashflow had delayed buyers in recent months.
Grain prices have faced constant falls during the past year, with many UK farmers likely to be receiving about £100/tonne for wheat. It is has been a similar picture of low prices in the dairy and livestock sectors.
Mr Willis said because prices may come down in the coming months, farmers may not wish to cover requirements too far ahead, but he urged them to get organised for what they would need now.