Significantly reduced winter plantings coupled with the continued wet weather both in the UK and in northern Europe, has reduced demand for all types of fertiliser – the result being that imported and home-produced ammonium nitrate prices are back as much as £60 per tonne on the year.

Add in falling UK natural gas prices, which are a key input into the nitrogen production process and continuing mild weather, all means that values have slipped steadily since the start of 2020.

Figures from AHDB’s monthly average fertiliser price guide for December, 2019, show UK produced 34.5% AN valued at £255 per tonne, down 12% on December, 2018, prices of £292/t with imported AN 34.5% at £243/t against £274/t, 12 months previously.

Phosphate prices have seen a bigger downward movement, with values for diammonium phosphate (DAP) and triple super phosphate (TSP), falling 19% and 15%, respectively, on the year in December at £332/t and £286/t.

Three months on and prices have slipped further according to those in the know.

Robert Ingham, fertiliser director for Glasson Fertilisers, which is based in Lancaster, with a depot near Montrose, said prices are back £40-£50 per tonne on last year due the lack of demand in global markets and on the back of reduced winter plantings.

“Winter wheat plantings are down by up to 40% south of the Border which could represent up to 350,000 tonnes of fertiliser in the UK. Scottish plantings are back by 10-15% and there is still little sign of spring plantings getting going,” he told The SF.

He added that sales had been slow since the start of the fertiliser ‘season’ too from July, 2019.

“It has been one of the strangest winters we have seen and sales were down in the last quarter of 2019 because the weather was too bad to sow winter cereals, particularly in eastern parts of England,” said Mr Ingham.

He pointed out that home-produced CF straight 34.5% Nitram is selling at around £230/t delivered, compared to imported 34.5% product at £220/t. Blended grassland fertilisers are also back £40-£50 per tonne on last year at £225/t for a typical 25:5:5 compound.

“It is a worrying time for the fertiliser industry and all in agriculture. However, whilst the weather has had an impact in the UK and in northern Europe, particularly Germany which has also struggled with poor weather, fertiliser is a global market and both urea and phosphate prices are starting to pick up due to increased demand elsewhere, particularly in the US and Latin American markets,” said Mr Ingham.

Closer to home, Ringlink managing director, Graham Bruce, who is based in Laurencekirk, said sales were back due to the lack of the demand but orders are picking up as we approach spring work and grassland requirements, though prices have been down, mainly due to the huge reduction in winter crops south of the Border.

“We have been lucky in the North-east in that we have not had the flooding those in the south have, but we are still wetter than we would normally be at this time of year and north of Inverness is particularly wet.

“Prices have dropped due to the lack of demand south of the Border, but there are just not the crops in the ground needing fertiliser. Many of those who have not been able to sow winter crops are also saying they are going to leave their ground fallow this year, so, prices in general will be lower this year.”

However, he added that urea values are beginning to show some signs of improvement due to limited stocks from producers in Egypt for March shipment following significant sales to the US and Europe, in February.

As a result, asking prices for the remaining tonnage are moving up and with the UK operating below replacement values, importers are increasing prices to reflect the global market.

Therefore, as demand for nitrogen increases, Mr Bruce said prices might increase, with Yara having already moved levels up in Europe by 5€/mt last week and the UK looked set to follow suit. He added, however, that imported AN is still available at a discount in the UK.

Ayrshire-based Robbie Duncan, of Quest Farm Supplies, had also noticed the reduced demand and ‘massive’ fall in prices compared to last year, with values down anything from £30-£50/t as a result of the poor weather and reduced plantings.

He also pointed out that less fertiliser is required year on year by livestock and particularly dairy farmers, as they look to make more use of slurry.

“Fertiliser purchases on dairy farms could be 50% down compared to what they were in 2010 because everyone now has to have six months’ slurry storage and farmers see how much growth they get from it applying it in the spring,” said Mr Duncan.

Yara business manager for Scotland, Gareth Flockhart, refused to admit the fall in fertiliser values was due to reduced demand.

He said granular nitrogen prices were back £60 per tonne on the year at £226 delivered, compared to liquid nitrogen at £270/t, down £15-£20 with typical grassland fertilisers, having slipped £30 at £260/t delivered.