Australian Fertiliser Outlook 2024-25 says Australian farm fertiliser consumption had declined 20 per cent in 2022, as the agricultural sector grappled with historically-high prices for farm inputs.
However, with prices now returning to more average levels and farmers seeking to replenish soil nutrients, another potentially good winter crop planting next year should see a strong recovery in fertiliser demand, according to report author and Rabobank farm inputs analyst Vitor Pistoia.
“In the past few years, economic shocks, COVID-19, the Russia-Ukraine war and other factors caused fertiliser prices to hit historic highs. This triggered farmers to change farm practices, with many trimming fertiliser application rates,” Mr Pistoia said.
“In Australia, fertiliser consumption in 2022 declined by 20 per cent year-on-year, with different nutrients showing different magnitudes of reductions. For example, nitrogen showed a smaller cut than phosphate, potash and sulphur.”
Mr Pistoia said farm input costs had begun to decline substantially from mid-last year, allowing fertiliser affordability to improve back close to historically-average levels, despite significant drops also being experienced in the prices of agricultural commodities such as grain, oilseeds, beef and dairy.
He said the “largest price relief” for fertiliser had come late in the buying period for the 2023-24 cropping season, so a recovery in demand and application rates was most likely to be seen in the coming 2024-25 season.
Further support for a recovery in demand would also come from farmers wanting to replenish depleted soil nutrients, after three years of good crop yields, he said.
While another large winter crop planting next year — above the 23-million-hectare mark, weather-permitting — would further support demand recovery.
Mr Pistoia said Rabobank’s expectations of a strengthening Australian dollar in the coming 12 months should also make purchase of imported goods, like fertilisers and agricultural chemicals, more affordable.
The report said anticipation of strong demand for fertiliser for next cropping season may drive Australian farmers to purchase ahead to secure supply.