Fertiliser costs climb in early 2025 but may hold longer term

The cost of fertiliser has continued to rise for farm businesses since the start of the year, as concerns mount over global trade frictions and availability of supplies.

Traders say urea prices have lifted by almost £40/t in the past month, and have approached £450/t delivered on farm.

This follows a much quieter period in 2024 for fertiliser markets, when urea prices remained close to £360/t for the majority of the year.

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Lorna Galloway, senior agricultural consultant at SAC Consulting, said fertiliser markets had been fluctuating since the turn of the year, and the industry may see further price rises.

“Rises at this time of year are typical due to increased demand for gas and reduced supply.

“Storage levels of gas in the UK and EU are at lower levels than usual for this time of year.”

Prices collected by Scotland’s Farm Advisory Service put urea at £445/t in February.

Meanwhile, imported ammonium nitrate was quoted at £370/t delivered, up by £18/t on the month.

The UK fertiliser market remains heavily reliant on imports and continues to be impacted by global prices.

Longer term, the AHDB has forecast that fertiliser markets should remain stable unless there are significant global impacts.

Fertiliser manufacturer CF Industries has forecast strong nitrogen demand in 2025 and says the global market remains constructive.

CF Industries suggested production in Europe had been challenging, with a significant proportion of Europe’s ammonia capacity either shut down or in curtailment as of January 2025.

Growers had delayed buying decisions for fertiliser due to weaker grain and oilseed prices, according to Origin Enterprises, parent company of Agrii and Origin Soil Nutrition.

But orders had picked up more recently, and stronger pre-season sales in Ireland had offset slower UK volumes.

Origin Enterprises made a profit of €7m (£5.85m) before tax in the half-year ended 31 January 2025.

Sean Coyle, chief executive at Origin Enterprises, said: “Encouragingly, lower year-on-year price levels has seen strong demand in order volumes for our animal nutrition and soil nutrition businesses for the remainder of the year.”

Demand on farm

Fertiliser demand in the UK has started to pick up as the weather improved in early March.

Scott Garnett, agronomist at fertiliser specialist ICL, emphasised that growers should prioritise overall crop nutrition this spring following another cold, wet winter.

He said: “This year more than ever, slow growing crops will really benefit from a multi-nutrient boost to kickstart them and pull them out of the winter.”

Emma Willis, environment and agronomy manager at AHDB, added that early nitrogen was particularly important for cereal tiller survival and any backward cereal crops would need to be carefully fertilised.