Last weekend, ABC Landline featured an important segment that outlined growing concerns about global production disruptions and the increasing costs of producing fertiliser. The story featured a spokesperson from the European Fertilizer Industry Association who articulated the impact that reduced supplies and escalating prices of gas are having on overall fertiliser production.
With Russia holding back gas supply, gas prices in Europe are continuing to rise, making the cost of producing nitrogen and ammonia prohibitive to the point where it is estimated that up to 70% of fertiliser production in Europe has been significantly curtailed as a result.
The spokespeople interviewed in the segment expressed major concerns in that the fertiliser shortage was expected to continue and as fertiliser becomes too expensive for farmers to buy, they will have no choice but to reduce usage which will have a flow-on effect on reduced yield and ultimately affect the future of food security.
So where does Queensland fit in this global supply chain and what are the potential implications for our farmers and our food security?
Australia is heavily reliant on global supply importing approximately US$2.82 Billion of fertilisers last year. Farmers have seen the cost of fertilisers increase by more than 120% over the past two years which has added to escalating input costs across the board and with over 5 ½ M tonnes of fertiliser used annually, these cost increases are considerable.
It is envisaged if these upward pressures continue, farmers will need to make changes to try and ensure future crops remain profitable. Variable application technology and improvements to soil health are enabling many farmers to achieve greater fertiliser use efficiency, however, a drop in fertiliser use in many cases may see a fall in crop yields.
Fertiliser is often not front of mind for many people when they think about key economic indicators, but it is a very important part of the overall agricultural supply chain. As Europeans call for government intervention to support nitrogen producers, Queensland farmers are also seeking solutions and support to ensure they can maintain production levels on farm. A reliable, affordable fertiliser supply is critical to the future of food security in Queensland, in Australia, and globally. As a country that is rich in natural resources, including gas, is it time to rethink how we sure up our future domestic supply of key inputs to secure our own food security?