news from ballance nz, page-3

Regulator
this one was placed febr 22 nd
Superphosphate price rises tipped for mid-year

Hill-country farmers are feeling gloomy about expected price rises for superphosphate even though major fertiliser co-operative Ravensdown intends to delay any increase to the middle of the year.

Overseas phosphate commodity prices have increased by 60 per cent in the past few months, forcing Ravensdown to lift diammonium phosphate (DAP) on Friday by $88 a tonne to $915 a tonne. Rival co-operative Ballance Agri-Nutrients was set on Saturday to add $91 a tonne to its price of $921 a tonne, up 10.8 per cent.

DAP is mostly used by cropping farmers, but this could place pressure on phosphate rock, used in superphosphate, a key fertiliser for sheep and beef farmers.

Ravensdown plans to keep superphosphate and urea prices as they are until June 1.

Federated Farmers Meat and Fibre chairman Bruce Wills said higher superphosphate prices above $400 a tonne would be mostly unaffordable for farmers struggling with lower returns, a volatile currency and higher costs.

He said the drop in superphosphate prices to $312 a tonne from $400 earlier this year had offered farmers some hope.

"I know it is not the fertiliser companies' fault, but if they go up, and particularly superphosphate which is the No1 product for hill-country farmers, the simple outcome will be farmers will stop putting fertiliser on. There are plenty of farmers I know who have not put fertiliser on for three to five years."

Ravensdown chief executive Rodney Green said the co-operative did not know how long it could hold down superphosphate prices, but hoped it could until the mid-year.

He said if DAP stayed up this could put pressure on phosphate rock prices which would flow through to superphosphate, so the co-operative urged farmers to put it on the ground now.

"We do not know if this is a bubble from United States planting or a long term trend. It could be a bubble, but no-one can predict [because] it is a volatile world."

This was not a ploy by the co-operative to run down inventories and it wanted to support farmers because of concerns about declining soil fertility levels, he said.

Since November DAP prices have risen by US$150 (NZ$215) a tonne to the detriment of cropping farmers. The main ingredients for DAP are sulphur, ammonia and phosphate rock, and prices for all of them have increased.

Ballance chief executive Larry Bilodeau said its new DAP price was well below 2008's peak of about $1800 a tonne. There was no evidence of a return to 2008 levels, he said.

International prices for DAP and sulphur had mainly risen because of companies replenishing inventory due to demand from India, the United States, Europe, Thailand, Brazil, Mexico and Australia.

Ad Feedback
Wills said less meat and fibre coming off the hill blocks from less fertiliser applied on pastures would eventually result in less national income.

This would come when farmers were being denied good lamb markets by a high dollar. A lower dollar would be a "double edged sword" with fertiliser prices likely to increase, he said.