It’s all very convenient for the world’s fertiliser manufacturers to stop talking to the press when international gas markets take off in ways that give them concern. And that was, most certainly, the case last week.
Their stock response to this type of situation is to close up shop and tell the world they are not quoting prices or delivery dates – until such time as they have recalibrated their world in ways that totally suit them.
This process could take days, or it could take weeks – who knows?
But one very telling thing that I have learned over recent days is that fertiliser manufacturers view any increase in natural gas price as a reason for putting their prices up in equal measure and within the same timescale.
In other words, there is no time lag between gas prices rising and fertiliser markets heading-off in the same direction – or so it would seem.
One can use terms such as perfect continuum or smooth transition. But the bottom line is that fertiliser and natural gas markets seem to be joined at the hip, certainly when energy prices are heading northwards.
So let’s hope the same principle applies when natural gas prices eventually start to weaken.
Waves of fertiliser pricing
Of course we have been here before. Back in April 2015, the Irish Farmers’ Association (IFA) hosted a ‘crisis’ fertiliser conference in the Heritage hotel, Killenard.
Speaker after speaker bombarded the attending delegates with facts and figures to explain the micro detail of the then fast increasing Irish fertiliser market.
Meanwhile, the IFA was strongly of the view that fertiliser manufacturers needed to fully explain themselves, given that natural gas markets were, apparently, heading south at the time – a development that seemed to be having little or no impact on the then escalating price of nitrogen.
But time passed, the IFA’s message seemed to get caught up in the avalanche of figures that were volunteered by the fertiliser industry and all the other guys in suits, who always seem to be experts after the event.
In any event, farmers were left to buy the fertiliser they needed and we all moved on to the next emergency.
Some things don’t change. And no doubt Irish farmers will be left to buy the fertiliser they need again in 2022, no matter what the price is.
Supporting primary producers
But there is one fundamental fact within all of this that Ireland’s agriculture minister, Charlie McConalogue must take full cognisance of.
Farmers will always be price takers when it comes to them acquiring both the inputs they need, and the price they get for their produce at the farm gate.
This is why primary producers must be always adequately supported.
It’s a reality that takes on even greater significance as the Irish government sets out to finalise a new Common Agricultural Policy (CAP) Strategic Plan while also placing agriculture front and centre in the battle against climate change.