Winter takes its toll as 'just in time' brigade hit by fertiliser shortage

THE arrival of spring has brought with it a number of concerns for farmers, especially those who left the ordering of their fertiliser requirements to the last minute.

"We are struggling with deliveries, especially getting into the north-east of Scotland, where we are now very much behind schedule" said Ken Bowler, marketing manager of GrowHow, the largest fertiliser manufacturer based in the UK.

He said that part of the problem was the ethos of "just in time" ordering now practiced by some farmers. But another reason for delivery problems was down to losing the best part of two months because of the severe weather.

There had also been problems in getting raw materials into the company's factories at Chester and Billingham.

Most of the fertiliser delivered into Scotland comes via return loads after lorries have taken timber south, but this system is very much dependant on sufficient vehicles looking for "back loads".

The delivery problem has been exacerbated by erratic supplies of one of the main ingredients of compound fertilisers – potash. Last year, most farmers trimmed their fertiliser bills and, as a consequence, potash companies reduced their output. Then a few months ago, demand rose and suppliers have been unable to cope, said Bowler.

He expected total fertiliser sales in 2010 in the UK to be about 1.2 to 1.3 million tonnes. This is well down on the 2008 figure which reached 1.6 million tonnes, but it is also well ahead of the 2009 figure where less than one million tonnes of artificial fertiliser were traded.

While Bowler was pleased to see an increase in sales in the current year, he also recognised that farmers were now far more aware of the need to use fertilisers in an efficient manner. The use of GPS technology during fertiliser application has resulted in the trimming of an increasing number of farmers' bills.

Back in the autumn, he predicted that prices would rise by 15-20 per cent in the coming 12 months. That prediction was correct in percentage terms, but the increase has arrived after only six months. In late October, straight nitrogen was trading at or about the 190 per tonne mark and now the price for full lorry loads is about 240 per tonne.

Compound fertilisers have followed with a similar increase because, while there has been a reduction in potash costs, the other two major ingredients, nitrogen and phosphate, are both more costly.

Lookinging ahead, he thinks with one major exception – that there will be more stability in the marketplace. This is because the price of fertiliser is largely settled by the exchange rate between sterling and the US dollar.

The possible exception, he said, might come if there was a hung parliament in the UK, which might bring some instability and consequential price increases into the marketplace.

GrowHow is this year investing 25m into improving the efficiency of its manufacturing plants, a commitment Bowler described as proving the company's aim to reduce its environmental footfall.