The Irish Farmers' Association - IFA

Lobbying Organisation The Irish Farmers' Association - IFA

Date published 21 May, 2023

Relevant Matter Public policy or programme

Public Policy Area Agriculture

Period 1 Jan, 2023 to 30 Apr, 2023

Specific Details Global Fertiliser Prices

Intended results To highlight that fertiliser is one of the main input costs on most Irish Farms. Teagasc research shows that in 2021, across all farming systems an average of 16% of direct costs was spent on fertiliser and if you take tillage this figure rose to almost 28%. Therefore, any movements in fertiliser cost are felt directly at farmer level. To highlight that the manufacture of inorganic nitrogen fertiliser is a heavy industry and natural gas is the primary input used in the process. Fertiliser is no longer manufactured on the island of Ireland and other nutrients such as potash and phosphorus must also be imported. The blending and bagging of a large quantity of fertiliser sold on the Irish market happens in Ireland. To point out that the latest CSO report for 2022 shows that the total cost of fertiliser to Irish farmers in 2022 was over €1.2 billion. This is an increase of nearly €0.6 billion in comparison to 2021. The average price of fertiliser was 141% higher in 2022 compared to 2021, however Irish farmers spread 19% less fertiliser in 2022 meaning an overall increase in total spend from Irish Agriculture of 97% on fertiliser. To point out that recent research by the Irish Farmers Journal showed that average profit per ton of fertiliser by merchants and co-op rose from a historic average of circa €50 a ton up to 2022 to circa €250 a ton in 2022 a 5-fold increase. One of the main drivers of the increase in fertiliser price in 2022 was the price of natural gas, which is a key raw material in the manufacture of inorganic nitrogen. The average price of gas in Europe in 2022 was 6 times higher the 2017 to 2021 average. Large spikes in gas price were seen, especially up to August 2022 at which stage prices were 640% higher, at €340 per megawatt hour as compared to August 2021. However, by year end, gas prices had decreased by 80% and this decrease has continued into 2023. Fertiliser 2023 - In the second half of 2022 there was a concern on the availability of fertiliser for use in 2023. Fears over gas shortages over the winter period in Europe led to forecasts that gas prices could spike even higher and thus result in a reduction on the amount of fertiliser being manufactured for use in 2023. To counteract this, a number of larger merchants sourced fertiliser and many farmers (mainly dairy and tillage) purchased product in Autumn 2022 for spreading in 2023 to protect against possible shortages or large price spikes. However, due to an exceptionally mild autumn across continental Europe, it became apparent that there would not be problems with the availability of gas across the continent and consequently price falls from the peak of August 2022 continued. This enabled the reopening of European fertiliser facilities which had closed and also an increase in production at locations where nitrogen production had been curtailed. As a result, the price of fertiliser decreased significantly internationally with an almost 200% fall in the price of many fertilisers traded internationally from the peaks of 2022 to March 2023. A fall in fertiliser prices paid by farmers is already evident in many other countries. For example, in the UK, the AHDB reported that the price paid for Urea by farmers had fallen by over 40% from September 2022 to February 2023. Unfortunately, no such price reductions have been seen in Ireland. As per the CSO fertiliser price data in the same period in Ireland the price of Urea has only reduced by 9% and from a higher level than UK prices were in September 2022. In early 2023 IFA members highlighted that the prices being quoted by merchants and co-ops were out of line with what was happening with fertiliser in other countries. IFA undertook a survey of prices and found a large variation in prices charged. As an example, the average price of Urea in Ulster was €780/t but in Munster, for the same product the price was an average of over €100/t more expensive. An even greater disparity was identified with the North of Ireland where prices were almost €300/t cheaper than in the south. After this survey IFA undertook a campaign to highlight this disparity to farmers and to encourage merchants and co-op to immediately pass back the lower prices to farmers. These efforts included a number of press releases, contributions to articles in national media and also the coordination of a number of loads of fertiliser from the north to different parts of the country to show what could happen if prices were not reduced. In the weeks following these efforts by the IFA, the price of all fertilisers has fallen, but they have also fallen in other markets so a disparity remains between prices here and in the North, Britain and mainland Europe. The case could be be made that due to the manufacture of fertilisers in Britain and Mainland Europe a price difference may exist but it does not explain the difference with the North seeing as there is no manufacturing on the island and in many instances the fertiliser being sold at a lower price in the North is coming into ports in the South. To highlight that farmers are price takers and farms cannot pass on increases on their input costs directly in the price they sell their produce for. For that reason, it must always be ensured that farmers are paying a correct price for their inputs and are not victims of profiteering by organisations in the input supply chain. In November 2022, the EU Commission announced the formation of a market observatory to share data on the production, use, prices, and trade for fertiliser in Europe. IFA will be an active participant in the expert group within this observatory and we would hope that all members of the Irish fertiliser trade will also fully engage in this.

Name of person primarily responsible for lobbying on this activity Brian Rushe IFA Deputy President, Karol Kissane IFA Senior Policy Executive, Max Potterton IFA Policy Executive, Elaine Farrell IFA Director of Governance & Oireachtas Engagement

Did any Designated Public Official(DPO) or former Designated Public Official(DPO) carry out lobbying activities on your behalf in relation to this return? You must include yourself, and answer Yes, if you are a current DPO or a DPO at any time in the past. (What is a Designated Public Official?) No

Did you manage or direct a grassroots campaign? No

Was this lobbying done on behalf of a client? No

Lobbying activity

The following activities occurred for this specific Subject Matter Area.

Submission (1)

Meeting (1)

Email (2-5)

Social Media (1)

Designated public officials lobbied

The following DPOs were lobbied during this return period on this specific Subject Matter Area. These DPOs were involved in at least one of the Lobbying Activities listed above, but not necessarily all of them. As returns are specific to a Subject Matter Area the above Lobbying Activities may be associated with multiple returns.

Barry Andrews MEP (European Parliament)

Billy Kelleher MEP (European Parliament)

Brendan Gleeson Secretary General (Department of Agriculture, Food and the Marine)

Brendan Smith TD (Dáil Éireann, the Oireachtas)

Brian Leddin TD (Dáil Éireann, the Oireachtas)

Cathal Crowe TD (Dáil Éireann, the Oireachtas)

Charlie McConalogue Minister (Department of Agriculture, Food and the Marine)

Chris MacManus MEP (European Parliament)

Ciarán Cuffe MEP (European Parliament)

Clare Daly MEP (European Parliament)

Colm Markey MEP (European Parliament)

Deirdre Clune MEP (European Parliament)

Denis O'Donovan Senator (Seanad)

Frances Fitzgerald MEP (European Parliament)

Grace O'Sullivan MEP (European Parliament)

Jackie Cahill TD (Dáil Éireann, the Oireachtas)

Joe Flaherty TD (Dáil Éireann, the Oireachtas)

Luke Ming Flanagan MEP (European Parliament)

Lynn Boylan Senator (Seanad)

Maria Walsh MEP (European Parliament)

Martin Browne TD (Dáil Éireann, the Oireachtas)

Matt Carthy TD (Dáil Éireann, the Oireachtas)

Michael Collins TD (Dáil Éireann, the Oireachtas)

Michael Fitzmaurice TD (Dáil Éireann, the Oireachtas)

Michael Ring TD (Dáil Éireann, the Oireachtas)

Mick Wallace MEP (European Parliament)

Paul Daly Senator (Seanad)

Paul Kehoe TD (Dáil Éireann, the Oireachtas)

Sean Kelly MEP (European Parliament)

Tim Lombard Senator (Seanad)

Victor Boyhan Senator (Seanad)