What you need to know about NZ's fert supply - Derrick Moot

This is a podcast from Rover.

All right, our reliance on nitrogen fertilizer should we be worried with the current state of global affairs?

Now, for example, Urea has gone up about 75% from last March to this March.

So who better to talk about this?

Professor Derek Moots, Professor of Plant Science at Lincoln University.

Good to have you back on. How are you?

I'm well, thanks. I'm good to be here.

Okay, firstly, the current situation, Derek, where are we at with, as I said, the 75% but what's the current state of play?

Well, I think we need to look at that from a global perspective.

So the numbers you're quoting are actually the global price of fertilizer.

But they're not yet the price that our farmers are experiencing because the majority of our farmers belong to one of two major co-ops.

And those co-ops, you know, they're farmer orientated.

So they've got product on the water or in storage that they brought at a lower price.

So at the moment, our prices haven't gone up as much as the global price because we've got that co-ops system operating.

And effectively, they're paying the price that those co-ops paid for the fertilizer prior to this latest conflict.

Right. Okay. So dollars to donuts, though, she's going to go up some stages. No, that's inevitable.

She's going to go up and it's going to hurt everybody.

But from that perspective as well, we're probably in a better position than most because this is not a major time of nitrogen fertilizer use for us.

It's a time when we might be putting on super phosphate, but from a nitrogen perspective, the stuff we're going to need this all to both our major co-ops tell me that they've got plenty on the ground.

And they're monitoring that at the moment.

So we should be good for this autumn, which is quite good for us because it is an autumn period,

whereas those guys in the Northern Hemisphere are about to get into their planting season.

So it's much more of a problem in the Northern Hemisphere right now as we're speaking.

Definitely. Where do we source most of our nitrogen from?

That's a good question. So most people would be aware that we've got Caponi, which produces about a third of it and balance operates that.

So that's the natural gas and they've been producing that from the existing gas fields.

Price of that's gone up as well recently, but about a third of New Zealand's Urea is coming from that source.

The rest of it is coming from overseas and it's being imported.

So as you indicated, those imported prices will flow onto us in future.

The Caponi side, is there any issues being faced there?

Not that I'm aware of. You'd need to talk to balance about that.

But I think the main issue is that there is competition for the gas that's around at the moment.

We've got industrial users and other users that are looking to use that gas.

So it'll be where the balance can get access to that gas at a price that's acceptable to them

when the energy sector and other industrial users are also trying to get gas.

So it's still operating, it's still running, balance is still involved in that and still utilising it.

So we look at dairy, as an example here, so impacts mitigation for dairy sector at the moment.

What are they facing? What are they looking at?

So the dairy industry historically up until about the mid 1990s never used nitrogen fertilizer.

So we actually just need to get back to those principles that we had prior to that system

when we allowed legumes to drive the system.

And we've really been doing that a little bit anyway because the government a few years ago put on restriction

so that we were only allowed to use 190 kilos of nitrogen to hit you anyway.

So a lot of farmers were heading in the direction of trying to increase the white clover and red clover content in their pastures.

So they've got two main options.

At the moment, yes, they can still use some of the nitrogen fertilizer for autumn pasture.

But come spring sowing, they should be reducing the right grass sowing rates and increasing the legume content in their pastures.

When you're using 190 kgs of N, it starts to become marginal as to whether that nitrogen is actually beneficial

or whether you can actually produce as much by having a high legume based pasture system.

And traditionally that's what New Zealand did with its dairy farming.

So it's going back to some of the things that we had historically done.

There's other thing that's come around, you may have heard of the holder collars that are around.

So there's an opportunity for farmers to grow a monoculture of a legume, for example, red clover,

and then use the collars to give the animals a couple of hours of feeding.

So getting nitrogen into the system in different ways rather than staying out of the bag is a possibility in the dairy industry.

I think there's two real options.

Getting more into their permanent pastures, but also maybe sowing a pasture with, say, red clover and checkery.

Having that for a couple of years and then drilling in the rye grass, that gives them a good legume base.

And also, as I said, the monocultures they can use and they can graze those strategically.

Either with a whey, you don't have to have collars.

You can use an electric fence to do that.

But a couple of hours of animals grazing a monoculture of a legume increases their intake, can keep the milk production up

and can also get more nitrogen into the system for them.

Okay, so that's the dairy situation with the sheep and beef guys.

They've been sort of being nudged into the legume stuff for a bit now anyway,

because there was some sort of thought that something like this might happen down the line.

Indeed, and a lower cost system has to be developed.

And our work at Lincoln has very much been around trying to nudge those guys into a legume based system for a long time.

So the East Coast guys have got a lot of them have now got monocultures of loose in that they're grazing.

They've got some flavour on the hill country.

So they're not big users of end, but strategically.

So an autumn nitrogen application across some hill country,

or a little bit of spring nitrogen application to lift the pasture cover if they haven't tough winter.

But the other thing to bear in mind is that museums probably in a reasonably good space

from a pasture cover perspective across the whole country.

We've had, you know, people might have said we didn't have a summer.

Well, we possibly didn't, but from a pasture perspective that's not been a bad thing.

So there is feed around, and farmers are actually using that to put on an extra couple of kilos for beef or sheep at the moment.

So we're not in a desperate situation for the sheep and beef guys.

They should continue down the sort of lines that we've been indicating to them for the last 20 years.

High legging content pastures, look at what the legum is that drives their system

and learn how to manage and maximise that.

Right, that brings us to cropping though, doesn't it?

And that's a different scenario entirely.

Yes, the cropping farmers, they're probably a big, biggest users of end.

So most of our maize crops need nitrogen, and that will be an interesting exercise

for the guys who are needing nitrogen.

But again, that's not going to be until spring.

So maize growers that might be putting maize for silence for the dairy industry to support

then they will have to make that decision based on what the price of that nitrogen is come spring.

For one to week, for example, there's not a lot of nitrogen used at this time of year.

So that's not going to be a problem for them immediately.

But they also need to recognise that they might have other options,

like putting a barley crop or they might take a feed crop that requires less nitrogen.

I wouldn't have went a week crop for feed rather than for human consumption.

The other thing they could think about is, again, next spring,

if the price is still high, maybe they should be putting in some monocultures of red clover

or some pastures and actually taking some of the dairy bulls and grazing those

I can't see the beef price coming back in a hurry.

And there may be some opportunity for them to sort of take a mixed farming approach

which they've traditionally done anyway to utilise a little more livestock on the property

rather than the nitrogen fertiliser required for the cropping situation.

What about, I know in Australia, seafood fertilisers are becoming more popular.

So we hear at least any way. Is that a viable option in our farming environment?

I think you need to be careful whenever you start looking at alternative products.

So as the price of, for example, nitrogen goes up,

you'll see a lot of products come out of the wood where it can be promoted.

But really farmers should be looking at what is the concentration of the main nutrients in each of those products.

So how much nitrogen phosphorus potassium sulfur is there in the product

because that's actually in the end what matters to the farmers when they put it on to the lamb.

So some people use seaweed, but you've got to look at what the NPKs and other elements are

within those fertilisers as opposed to just thinking that they're an alternative.

Because in most cases they are not an alternative to the solid fertilisers

that we've been talking about the area and the calcium ammonium nitrate

or ammonium sulfate sorts of fertilisers that we get in solid form.

So you mentioned that we've specifically been talking about nitrogen here

and the supplies of it, as you say, the time of year.

It seems to be okay. There's enough supply, et cetera, et cetera.

But what are the other sort of fertilisers?

I mean, what are we looking at in terms of a bigger picture?

Yeah, the same thing with super phosphate.

So we are big users of super phosphate.

And again, we've probably got sufficient on storage for the autumn and the spring.

Super phosphate also requires sulfur and sulfuric acid.

And those sorts of things may become in short supply in future.

I'm not 100% sure on where we source our sulfuric acid for our manufacturing of super phosphate.

So I don't want to get out of my lane so much.

But I think we're all right for super phosphate at this stage as well.

One thing I suggest, Dom, is farmers shouldn't try and sort of hoard fertilizer.

One of the things that happens when you do that is you get some moisture into it.

And it sets like concrete.

And it become really difficult to utilize.

I mean, that's what we have these coops and industries for is they do that for us.

So it can become a problem if you start doing that.

It's a bit like, do I try and store petrol in the shade?

It's not really the best place for doing it.

Well, fertilizer storage is a bit the same.

You don't really want to be taking a whole lot of it and putting it in the shade over the winter

or you will have a block of concrete to be dealing with come spring.

Yeah, that's a really good point actually.

I mean, as you've outlined, the, you know, more legumes on pasture.

I know there's a lot of research to be going into this.

Is there anything new or in terms of results that we're seeing from this approach?

Well, it was interesting.

I was on farm in a property in the central plateau last week.

And there was a farm there, one of the palm tree farms had 750 hectares of loose end going in.

And the vet was talking to us at that point.

And highlighting the importance of nutrition through lactation.

And just indicating that a growing animal.

So, you know, a land that's just been born actually requires high protein.

It requires more protein than what we call carbohydrate or energy.

Because it's growing its organs.

It's growing its bones.

It's growing its organs.

It's growing its immune system.

And so the best results we see out of lamb growth or young calves, young animals growth,

is when they have a high legume or a high protein diet.

It's good for their, for their, putting on life weight.

But it's also good for their immune system, which then benefits the whole production cycle.

So, there's a lot of benefits coming through as in different areas that we see

from getting the high legume content pastures into particularly lactating animals,

you know, used at a feeding lamb.

So, if they can have a high legume content, then that's good all round.

Okay, well, so to sum up then in terms of the supply of nitrogen,

where we started this whole thing, at the moment, as you say,

time of year co-op system, these sorts of factors,

nothing to worry about or panic about at this stage.

Let's hope that, you know, overseas events kind of, you know,

can be resolved in a timely fashion.

And it's not panic stations yet to sum up Derek.

Correct, look, I know that there will be other cost price rises.

So, you know, there's freight costs and other things come into it.

So the price of fertilizer will go up.

But we're not experiencing the world price at the moment.

And as I say, the co-ops have got fertilizer in store.

And so, we should be all right for the winter period.

If we're fortunate, we're coming into winter and not spring.

Good man, always appreciate your expertise.

Thank you, Derek, appreciate it.

My pleasure.