Input costs like fertiliser show farmers need to start to plan ahead

It spurred many farmers in western Victoria to mitigate at precise times ahead of this year's cropping season.

Andrew Weidemann, Rupunyip, said the timing was critical for him ahead of this year's cropping season.

"Prices have been almost 100 per cent and in some cases up to 120pc particularly for fertiliser costs," Mr Weidemann said

"We are fortunate enough that I bought fertiliser back in October last year, so we've offset some of it, but we still need to find and buy in more nitrogen if the season keeps going pretty well.

"We'll weigh that up against what's happening globally with the price of grain as well."

Mr Weidemann said that he is very optimistic about his cropping operation, which is making him less concerned about input prices, but much will depend on weather forecasts and crop quality in spring.

"We still have a normal input regime for our season, and that might improve or increase as the year starts to unfold when we start to see a little bit more price security and certainly in terms of grain and how the outlook of the year is going to go," he said.

Another farmer from the Wimmera however believes employing alternatives outside of urea for their crops is the way forward.

Graeme Maher, Lubeck, is one farmer who started to explore opportunities for his cropping operation.

Prior to the COVID pandemic, he had sought advice from consultants for alternatives for inputs.

"Instead of spreading single superphosphate, we're putting out a compost, rock phosphate mix," Mr Maher said.

Still, it's been a rough road to get to this point for his crop.

"We couldn't do that initially because we didn't have a spreader until last Thursday," he said.

"On Tuesday, we'd get the fertiliser and do all that, but it has meant that I've been busy ringing around asking if I can I pick the fertiliser up and then if I can drop it off.

"That's the last jigsaw in the puzzle now that the gypsum's in and the normal fertiliser's spread, so I am waiting on this composite mix and I think I have ticked those boxes now for our sowing."

READ MORE:

Mr Maher said while his operation is small compared to others in the Wimmera Mallee region, it was essential for farmers to be aware of the rising input costs now and look to alternatives.

He said continuing high prices could potentially interfere with farmers' gross margins down the track.

"Last year, urea was $500 a ton," he said.

"It's now $1500, and you might not be able to grow the crop you want because you can't get it and can't afford it.

"That's where the compost initiative comes in."

Mr Maher said personal health also spurred on some of the changes in his thinking regarding fertiliser inputs.

"We used to put out a lot of insecticides in the cropping phase too, and I used to get a pretty nasty headache," he said.

"Once the sowing of a crop was done, people would up their nose and think it was not much fun, but you'd just grit your teeth through it.

"I suppose we started to re-evaluate all that too with the sheep enterprise three or four years ago, and that all helped."

Mr Maher - the 2021 Elanco Sustainable Producer of the Year - said financially viable operations should look to diversify their operations, hence his foray into running ewes.

But Andrew Whitelaw, market analyst at Thomas Elder Markets, said while alternative fertiliser usages outside of urea are good options, the reality is that those methods wouldn't be able to satisfy the cropping belt of Victoria or nationwide.

"The reality is that it will work for some farmers, but it won't work for all farmers," he said.

"If we think about the actual level of production of compost like organic compost, there's not all that much produced in Australia.

"I think farmers will be looking at how much they apply, and it might be reducing the amount of fertiliser that they put into the ground to be more efficient."

Mr Whitelaw said whatever happens in the short term in Ukraine urea prices will remain high for the coming months, due to sanctions imposed on Russia.

"Modern synthetic fertilisers, like urea, are a conversion of energy to fertiliser, so you basically have a big factory, you take gas in, and you turn it into urea," he said

"Russia is a huge exporter of that gas, and what the conflict has done is that gas prices, crude oil prices, and coal prices have all gone through the roof, which has a direct flow-on effect on fertiliser."

But he also said that China's plans to open up exports of fertiliser in could be a factor that could assist prices in future.

"Every little helps, and extra supply on to the marketplace will potentially lead to lower prices," he said.

"What that number could be is anyone's guess."