At around £500/t for new season 34.5%N, fertiliser prices are again prompting concern across the arable sector. Compared with this time last year, growers are facing roughly £150/t more for nitrogen, adding around £80/ha to the cost of growing winter feed wheat.
That increase is uncomfortable, and some businesses reduced rates this spring in response to rising costs. But cutting too far risks sacrificing yield and, where relevant, milling premiums that are already under pressure.
The key point is that nitrogen still broadly makes economic sense. Wheat prices have strengthened by about £20/t over the same period, which on a typical winter wheat crop equates to roughly £170/ha in extra revenue — comfortably offsetting the higher fertiliser bill.
It is also worth keeping today’s figures in perspective. While £500/t feels expensive relative to recent seasons, it remains well below the extraordinary levels seen in 2022, when nitrogen surged beyond £900/t following the escalation of the Russian-Ukrainian war.
The current market backdrop is different, but the balance of risk still appears weighted more to the upside than the downside for both fertiliser and grain. If higher fertiliser prices persist globally, lower application rates are likely, reducing grain output and tightening supply.
In that scenario, grain prices could strengthen further. For growers who continue to use nitrogen strategically rather than reactively, today’s values may still support output, quality and margin. The challenge, as ever, is balancing short-term cashflow pressure against the longer-term profitability of the crop.
Graham Redman is a UK agricultural economist, farm business analyst and editor of the long-running John Nix Farm Management Pocketbook.
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