Fertiliser prices fall, Wimmerra-Mallee farmers have confidence

Urea prices have fallen a staggering 57 per cent since hitting peaks in excess of $1600 a tonne last year, with current port prices sitting at $680/t, the savings of near $1000/t helping off-set the rise in interest rates.

The massive run up in prices last year was caused primarily by the increase in the price of gas, a key ingredient in urea.

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National Farmers Federation vice president and Murra Warra crop farmer David Jochinke said supply and price had corrected to a "normal range" after a relatively-high input year.

"Now in many areas having good subsoil moisture and prices being where they are it's even more attractive to be prepared to maximise the potential of this season, noting we'll still to have a reasonable start and spring to finish it as well," he said.

"It is very attractive to prepare for a reasonable season but we're still having some challenges with our chemistry and accessing some of our seed varieties."

Mr Jochinke said the markets were strong with canola and some lentil seed in high-demand, and its current state helped farmers gain confidence in the season.

"Markets are strong, canola is at the high $600/t, urea is at the high $600/t as well and with an okay subsoil moisture profile, it's a strong position for people to have confidence to grow those high-input higher-return crops," he said.

"Likewise with lentils, the new variety Thunder I believe is sold out or they're currently fully allocated waiting for the yields for their cleaning to be done to see if they have any extra.

"It's a supply chain and demand question, I believe this season has strong fundamentals, good subsoil and high confidence because people have the capacity to invest in this season.

"We'll see strong demand for fertiliser but that strong demand is met by a supply chain has finally caught up."

European pipelines to Russia were cut as a result of the war with Ukraine and prices skyrocketed, with urea following suit.

Strong demand from growers internationally as they sought to take advantage of high commodity prices exacerbated the problem, which saw values hit new records.

However, Episode 3 commodity analyst Andrew Whitelaw said the grain produced required to buy a tonne of urea had fallen back to more normal levels.

"We're looking at around 1.5 tonnes of wheat and 800kg of canola which is still on the higher side historical but back within the normal range."

On the phosphorus front, prices still remain relatively steady at around $1050/t for MAP and DAP type products.

Mr Whitelaw said fertiliser businesses had been trying to move stocks of higher-priced urea in storage but new deliveries meant the price had come down in line with the global trend.

"Prices here are around $200/t above the international value, which is broadly in line with the historical average, with the figure much higher last year during the period of high pricing."

Peak demand for phosphorus is expected over the coming months in the lead up to the planting of the winter crops while N demand will be a more gradual peak due to the ability to top-dress the product in-crop.

There may be N shortages in the soil after heavy crops or denitrification of the soil due to excessive moisture.

Farmers are now contemplating revising their fertiliser budgets, either to make savings by sticking with existing tonnages of urea or to bolster nutrition by sticking with the budget and purchasing additional tonnes.

Demand for the upcoming year is somewhat of an unknown, given weather models are showing some signs of forecasting a dry season but many farmers having good moisture at depth from last year's big wet.