COAG denounces an extra cost of 25 million euros for nitrogen fertilizers

COAG has calculated the premium that the farmers of Castilla y León would have to pay for fertilizing the crops of the spring campaign, in which we are immersed, with nitrogenous fertilizers, and the tidal figure: 325 million euros more than last year. And without including the cost of the background subscriber in the calculation. The normal thing is to think that the bill will not finally reach that exorbitant amount because many farmers will substantially reduce the fertilization doses or, directly, they will not pay, or they will change towards crops with lower fertilization requirements. A reduction that could reach, according to some estimates, up to thirty percent, so the extra cost could reach two hundred and twenty-five million euros.

And as the causes that have triggered the prices of fertilizers also affect the other inputs of the field, the peasants will have to face, also at this time, increases of more than 75 percent for the price of diesel, and 40 percent of feed.

COAG has analyzed the markets of the 4 basic pillars of agri-food production, that is, diesel, feed, fertilizers and electricity, and has verified, on the ground itself, that the increase in prices has already entered a critical phase (“El field is in the UVI”, affirms the agrarian organization) and that such prices have not yet stopped.

The countryside of Castilla y León is focused these days on the fertilization of seasonal crops: irrigated land, vegetables, beets, potatoes, corn, etc. Well, the bill that farmers will have to pay for dispensing nitrogenous fertilisers, which are the ones they are dealing with now, is going to be far above what they faced in 2021. Nitrate has risen from €235 per ton to €700 , nitrosulfate has skyrocketed to €725 per ton from the €260 it cost last year, and urea, which is the star of raw materials in the manufacture of fertilizers, jumps from the €320 it cost on day 4 from March 2021 up to €950 today. The data has been collected by COAG in the markets.

Castilla y Leon, which is the first national power in fertilizer consumption, buys an average of 1.3 million tons each year, an amount for which our farmers pay an average of 411 million euros, according to combined data from the National Association of Fertilizer Manufacturers (ANFFE) and the Ministry of Agriculture itself. The investment in nitrogen, 40 percent of the total is, in a normal year, 165 million euros. But 2022 is not a normal year; if it were and it was paid as in previous years, the bill would shoot up 300 percent to 490 million euros, 325 million euros more.

But this is not the only concern of field professionals regarding fertilizers. Apart from the price, there are many doubts about the availability for the next campaign as a result of the closure of factories due to the cost of energy, as well as the shortage of raw materials due to the war that affects the main exporting powers. In this sense, from COAG we urge the national government and the EU so that, just as they are looking for alternative sources of gas and oil, they also look for other markets in which to supply us with raw materials for the manufacture of fertilizers, because the production of food , a fundamental strategic issue for our country, is highly dependent on this factor.

Another basic input, diesel B, also raises its prices to the top of the tables. In May 2021, a liter of diesel B was €0.873 in Spain and €0.848 in Castilla y León. In May 2022, the first amount is €1,494 and the second amount is €1,505. The increase is 71.12% in Spain and 77.48% in CYL.

Feed, which has added to the imbalance of the supply/demand market due to confinement, to the crisis of raw materials, to atmospheric phenomena, to the transport crisis, to the logistics crisis, to the energy crisis, to everything previous, Russia’s war against Ukraine, those of fattening pork have soared 42 percent, from 310 euros to 443 between March 21 and March 22; 42 percent also those of calves in the same period, from 301 to 429; 39 percent of dairy cattle, from 282 to 392 euros; and 34 percent those of dairy sheep, from 215 to 289 euros per ton. To name just one fan.

This has been the case because the raw materials for the production of these nutrients have also increased by 54% for corn, 57% for wheat, 66% for barley and 31% for soybeans.

Electricity, however, is moderated. The price of a megawatt went from 283 euros in March this year to 191 euros in April. However, farmers and ranchers have had to endure year-on-year increases of 523 percent. The price of the megawatt in March 2021 was at an enviable 45 euros.

The trend of this input is downward and towards normalization, after the community approval of the Iberian proposal to cap gas for electricity generation, it will be the dominant trend far from the mountains that have drawn the bills in recent months.