Consumers are likely to feel the price of skyrocketing fertiliser costs at the dinner table, with producers in Western Australia’s remotest agricultural regions struggling to break even.
- A corn grower in the Ord Valley does not expect to make a profit this year, due to rising input costs
- Fertilizer prices have doubled for some growers, as a result of the war in Ukraine and supply restrictions
- Supermarket prices are expected to rise
The cost of fertiliser has soared in recent weeks, off the back of the war in Ukraine and the resulting sanctions on Russia, the world’s biggest fertiliser exporter.
It’s left growers – particularly those in Carnarvon and the Ord Valley – facing cost increases of up to 50 per cent and struggling to break even.
Limited flexibility a factor
In the Ord Valley, farmers are expecting a challenging year with a low chance of fruitful returns.
Farmer Fritz Bolton said several of the region’s corn growers had locked-in forward contracts with long-term customers, leaving them with limited options to wind back fertiliser inputs.
Compounded by pressures of increasing fuel, chemical and machinery costs, Mr Bolton predicted a “break-even” season on his farm, despite strong commodity prices.
“We’ve got customers that we’ve made commitments to, and we’re not planning to undermine that at all,” he said.
“We are also long-term operators, so if we have one bad year, we accept that that is going to happen every now and then.
Adapting to survive
Together with concerns around finding suitable labor, Carnarvon Grower’s Association manager Nick Cuthbert said “out of control” fertiliser prices had led some growers to scale back their planting this year.
“I think the general narrative leading into this season is one of trepidation,” Mr Cuthbert said
“We haven’t had the labor issue resolved either, so growers are facing this season with obviously significant increases on the input side, but with great uncertainty about how they’re actually going to be able to pick a crop as well.
Along with reducing plantings, Dan Kuzmicich said growers were starting to “think outside the square” to counter rising input costs.
On his Carnarvon property, Mr Kuzmicich traditionally grew capsicums and eggplants but had begun trialling tomatoes to help spread his risk.
“I encourage all growers to be diverse,” he said.
Similarly, in the Ord, Mr Bolton said he would consider alternative options for his 2023 cropping program.
“What we are thinking about for next year if the supply and price issues don’t change is that we’ll end up growing crops that require less nutrition,” he said.
“We’d be moving away from corn and high nitrogen use crops and probably growing more legumes, so mung beans, in particular, might be something that we grow a lot more of.”
Consumers should expect price rise
As producers are forced to counter the increased cost of production, consumers are likely to feel the effects at the supermarket.
Director of Australian Producer Brokers, Matthew McRae, said capsicum prices, for example, had already increased significantly.
“Retail prices are pretty dear — $12 to $14 per kilo,” Mr McRae said.
“If you went back a couple of years ago at this time of year, the standard price is $9.99.”
Mr McRae expected the supermarket price increase would be ongoing, and sale prices would be limited.
“You won’t really see [produce] super cheap anymore.”