Farm businesses are under input cost pressure from a number of angles. This ultimately affects decisions being made on members’ farms and directly feeds through to levels of profitability.
Future prices and political issues
We have put together a briefing for members which looks in detail at the current state of play, future prices and associated political issues. These issues are closely linked to the continuing crisis in Ukraine.
There is also attached an oil and gas risk map, highlighting the issues that may affect prices between now and into the future.
We look at:
- natural gas
- crude oil
- motor fuels (including red diesel)
- fertilisers (which discusses the issue around fertiliser pricing and the closure of the Cheshire CF Fertilisers factory)
- plant protection products
- other agricultural inputs
- wheat (including Ukraine)
- metals – including aluminium, iron ore and copper
Fertiliser prices – for example ammonium nitrate – are now at a record high due to the gas price going up and difficulties with supply.
Potential consequences of fertiliser factory closure
The briefing discusses the current situation in the fertiliser market and the potential consequences following the announcement to close one of the two principle fertiliser factories in the UK.
The NFU has urged the government and industry to help farm businesses plan for next year’s crop by publishing fertiliser prices. There is a lack of transparency in the fertiliser market in terms of prices and availability. This has left growers with a lack of information risking serious impacts for the 2023 growing season.
Defra’s input cost data is considered, showing a 28% increase overall across the past year.
Metal prices, such as iron ore, aluminium and copper have fallen which will hopefully flow through to reduced materials costs going forward.
The impact of the war in Ukraine
The situation in Ukraine cannot be ignored and is behind much of the cost rises and volatility, and wheat is no exception.