NFU President Minette Batters described the announcement as ‘extremely worrying’ and said it was a sign of the pressure energy markets are under.
Farm businesses across the country are being affected by the ongoing energy crisis. Gas prices continue to surge, with prices more than double what they were in early June and 11 times higher than this time last year.
Farm businesses are also facing huge increases for new electricity contracts, with a number of long-term contracts coming to an end. The ongoing disparity between wholesale and retail electricity prices, escalating standing charges and the need to improve market access for those producing renewable electricity are the key challenges in the electricity market.
The NFU is continuing to engage with government on the ongoing energy crisis, stressing the impact rising costs are having on farmers and growers’ ability to produce food. It is essential there is cross-government collaboration, particularly between Defra and BEIS, to address this issue.
“We will be monitoring any impact this decision has on the immediate fertiliser market and we will be meeting with CF Fertilisers to understand what this suspension means for future fertiliser orders and how long this temporary halting of production is anticipated to last for.”
NFU President Minette Batters
In a statement, CF Fertilisers attributed its decision to halt ammonia production, a key ingredient to produce fertiliser, to market conditions which make producing the product uneconomical.
It did state that it expects to fulfil all orders of ammonium nitrate fertiliser contracted for delivery in the coming months. At its meeting with CF, the NFU will be pressing to understand what this decision means for future fertiliser orders.
The suspension of ammonia production also means that CF will cease to produce CO2, which is a by-product of the ammonia production process. CO2 is an essential ingredient in food production and food processing, with slaughterhouses and processing plants reliant on it to process and package food.
Reacting to the news, NFU President Minette Batters said: “This move by CF Fertilisers to temporarily suspend ammonia production is extremely worrying and is a sign of the pressure the fertiliser and energy markets are under.
“We will be monitoring any impact this decision has on the immediate fertiliser market and we will be meeting with CF Fertilisers to understand what this suspension means for future fertiliser orders and how long this temporary halting of production is anticipated to last for.
“The NFU will continue to engage with the government on action to improve the resilience and transparency of the fertiliser market, which is crucial to maintaining and enhancing our domestic food production. I am also urging the government to review how this decision impacts CO2 availability in the UK, which is essential in the food supply chain to process and package food.”