Fertiliser prices are set to rise 7% next year, according to Teagasc’s Outlook for 2015.
According to Teagasc, despite the recent moderation in energy prices, a weaker euro and concern with regard to security of supplies, suggest that fertiliser prices may rise in 2015 relative to the average level in 2014.
It says an average increase in prices of about 7% is forecast relative to 2014.
Teagasc cites in its outlook that fertiliser use increased in 2013, most likely as a hedging strategy to ensure an end to the fodder shortage. It says there was a slight reduction in fertiliser use in 2014, which had much better growing conditions, allowing a significant build-up of silage stocks.
Teagasc says it is assumed that on average fertiliser use in 2015 will be on a par with the 2014 level, acknowledging that there is potential for an increase in fertiliser use per hectare in 2015 on farms with more ambitious expansion plans.
With fertiliser prices forecast to be up 7% and Teagasc forecast that usage levels are set to be unchanged, this would leave total expenditure on fertiliser up 7% in 2015 on livestock farms.
On tillage farms, Teagasc says a number of factors need to be considered when price and volume changes for fertiliser on crop farms are forecast for 2015.
It highlights that CSO official monthly price indices for fertilisers for 2014 are only available up until the end of September; these indicate a relatively benign story for fertiliser prices recently.
However, it says also that market reports currently indicate that fertiliser prices for winter and spring sown crops will be up on 2013/2014 levels. P&K compound fertilisers are forecast to trade around 4-7% higher in early 2015 compared to the same period in 2014, and CAN is expected to trade at about 7% higher than 2014.
Teagasc says latest reports suggest this forecasted increase in fertiliser prices is associated with supply side uncertainties in addition to expected changes in the euro/Dollar exchange rate in 2014.
In terms of usage Teagasc says it is expected to be on a par with 2014 levels, given that for agronomic reasons the scope for reduction in use in response to higher fertiliser prices is limited for cereal farmers.
Overall, it says it is can be expected that fertiliser expenditure will increase by about 5% in 2015 on cereal farms. It says this expenditure increase is somewhat different than the expenditure change expected on livestock farms given the different expected price and volume changes on livestock farms.