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Catherina Cunnane
Catherina Cunnanehttps://www.thatsfarming.com/
Catherina Cunnane hails from a fifth-generation drystock and specialised pedigree suckler enterprise in Co. Mayo. She currently holds the positions of editor and general manager at That's Farming, having joined the company in 2015.
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‘2022 fertiliser prices could be more than double their 2021 level’

Fertiliser, feed and fuel – three of the main items in farm production – prices will increase in 2022.

That is according to the Teagasc Outlook 2022, Economic Prospects for Agriculture report, which the state agency published earlier this morning (Tuesday, December 7th, 2021).

Teagasc stated that cost pressures built up over the second half of 2021 dominate 2022 market prospects.

It stressed this will impact to a “greater extent” on incomes in 2022 than this year.

“Higher cereal harvest prices in 2021 will likely lead to a further increase in feed costs in 2022,” the state agency said in a statement.

“The rise in oil prices in 2021 should be followed by stabilisation at this higher level in 2022. However, this will mean that fuel prices in 2022 will average substantially higher than in 2021.”

2022 fertiliser prices

However, Teagasc views fertiliser price as the “greatest concern on the cost side for 2022”.

“The high price of natural gas, a key ingredient in fertiliser production, has disrupted production in the international fertiliser industry this year.”

“This escalation in natural gas prices is unprecedented and has been caused by a reduction in the supply of gas available on the European market, which is increasingly dependent on imports.”

The report said that these very high natural gas prices, which have pushed up the cost of fertiliser production, are likely to persist into 2022.

“Fertiliser prices have risen to record levels as a result. Therefore, fertiliser prices and availability will represent twin concerns for farmers next year.”

“Fertiliser prices in 2022 could be more than double their 2021 level. This may cause a reduced level of fertiliser usage.”

The state agency said grassland farmers may review their level of fertiliser usage in an attempt to offset some of the rises in production costs.

“If lower fertiliser usage leads to a fall in grass production, farmers will need to carefully monitor silage and fodder stocks for the winter of 2022/23 and seek to avoid filling a shortfall of grass for grazing with extra concentrates.”

It said tillage farmers would have less discretion concerning fertiliser use, given the lower usage impact on tillage yields.

Fuel and feed prices 

For the year as a whole, feed prices are forecast to increase by about 6% in 2022.

Fuel prices are forecast to rise by 16% in 2022.

Crude oil prices are forecast to stabilise, but will be higher on average in 2022 than in
2021. A further carbon tax increase will also occur.

As a result of rising input costs, Teagasc predicts that incomes will decline in 2022.

Other articles:

‘Significant’ 2021 income increases for dairy, sheep and tillage farmers

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