Is £500/t 34.5%N expensive or cheap?

At around £500/t, new season 34.5%N is £150/t dearer than this time last year.

It adds £80/ha to the cost of growing winter feed wheat, equivalent to almost half a tonne of wheat last winter.

Some growers applied less N this spring as a result, perhaps foregoing some yield or a milling premium which has also been small.

Some will be planning a similar reduction for next year’s crop.

But wheat has risen by £20/t over the same time, equating to an additional £170/ha of sales. The economics of fertiliser remains in the farmers’ favour.

The rise in fertiliser price is small compared with 2022 when the Russian-Ukrainian war escalated and Nitrogen rose over £900/t, another £400/t beyond current quotes. That wasn’t a resourcing issue, it was because grain prices rose, fuelling demand for farm inputs. This time, fertiliser (and fuel) price rises will push grain values. But by how far?

Manufacturers are finding new ways to source natural gas away from the Strait of Hormuz, and military action in Iran has reduced of late so N prices might fall, but there is no guarantee.

The price upside must be greater than the downside. This is for both nitrogen and grains from their current positions.  If fertiliser prices remain high, and is therefore used less around the world, global grain production will fall, which will be useful for those who applied nitrogen at £500/t.