Regional Fuel and Fertiliser Problems - Agri Conversations with Ned Mulholland in Wagga Wagga
Regional Fuel and Fertiliser Problems - Agri Conversations with Ned Mulholland: last week we released a report covering the global disruption to farm inputs due to the US-Iran conflict. Yesterday, I saw clients and colleagues in Wagga Wagga (southern NSW) to see what’s happening on the ground. Commbank Agribusiness Executive Ned Mulholland and I chat about the impact of offshore disruption to the farming sector.The Strait of Hormuz closure has blocked roughly 40% of the world’s urea and 20% of its oil exports. In regional NSW, so far, the main challenge has been related to high prices as opposed to shortages. In most cases you can still get the farm inputs you need, but you need to pay up at considerably above pre-war levels. While 60% of the nitrogen fertiliser and a large proportion of fuel used by Australian agriculture is consumed by broadacre cropping, the impact is broader. Livestock producers who are sowing and improving pastures are impacted. Livestock operators are also impacted by increased cost of cartage of livestock. In Southern NSW most cropping farmers are pushing ahead with their planting programs in coming weeks due to favourable soil moisture profiles. The main question is whether post-crop-emergence (June), farmers will reduce their nitrogen application rates or possibly spread fertiliser later in the season if it becomes cheaper. The sooner the Strait is reopened, the less chance yield will be impacted by reduced nitrogen application. High prices have a large sway on how much nitrogen fertiliser farmers will choose to apply.
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