Fertiliser Price Tracker

[4course]

I'm bringing this over from another thread because it is more relevant to this thread:

This is the main problem - having to lock up such a lot of working capital for so long, before you see any return.
Yes, you can fool yourself that even at £1,000 a tonne for N fertiliser you will get you money back. But how do you finance it in the first place? And how amenable are Bank Managers going to be to allow it?

There used to be a service offered though merchants by NatWest called GROW-CASH.
GO-CRASH we used to call it, because virtually everybody that used it would almost certainly be at their overdraft limit most of the time.

It worked by Merchants offering to finance your fertiliser via Grow-cash, repaid by a future sales contract of a growing crop to the merchant. The interest rate was competitive and it meant you didn't need that awkward conversation with your Bank Manager.

I know some merchants can do this in-house already.
But I foresee a massive increase in this type of finance to offset every £29,000 lorry load of fertiliser that turns up on farm from now on.
Especially as BPS payments drop and won't cover that cashflow requirement any longer.
Resulting in even more of a strangle-hold of Farmers by their Merchants.

EDIT:
I've just looked up GrowCash on Google. It still exists calling itself Grow Cash Club.
In reality, it's a Merchants wet dream!

when I first started out on my own had little option but to use merchant credit with buyback contracts. My hard earned hard learned advice is avoid it like the plague or sell up and go work for them directly to cut out yourself the middle man squeezed at both ends

 

[Two Tone]

when I first started out on my own had little option but to use merchant credit with buyback contracts. My hard earned hard learned advice is avoid it like the plague or sell up and go work for them directly to cut out yourself the middle man squeezed at both ends

Heads they win, tails you lose.

 

[Tarw Coch]

Always sell it cheap . next question

Generosity or bad marketing?

 

[DrWazzock]

This is the dilemma. Cash in an ISA/borrow some money to buy fertiliser? Sell some grain forward (into a drought!) to try to put a bottom in returns to pay it back.
Looks like Putin is playing silly beggars with the gas so I can’t see a time of stability in the short term.
I’m inclined to wait and see what happens. I don’t need it till next March. I’ve bought a bit of base recently to spread the risk. Just potash. Phosphate holiday here this coming year. Index is good.
Will await new season prices and see. But I’ve little appetite. Could be sitting here with it at half price by Christmas and grain back below £200? Unlikely put possible.

 

[teslacoils]

when I first started out on my own had little option but to use merchant credit with buyback contracts. My hard earned hard learned advice is avoid it like the plague or sell up and go work for them directly to cut out yourself the middle man squeezed at both ends

I did the same. Worked well. There was no other option so it didn't need thinking about.

 

[4course]

This is the dilemma. Cash in an ISA/borrow some money to buy fertiliser? Sell some grain forward (into a drought!) to try to put a bottom in returns to pay it back.
Looks like Putin is playing silly beggars with the gas so I can’t see a time of stability in the short term.
I’m inclined to wait and see what happens. I don’t need it till next March. I’ve bought a bit of base recently to spread the risk. Just potash. Phosphate holiday here this coming year. Index is good.
Will await new season prices and see. But I’ve little appetite. Could be sitting here with it at half price by Christmas and grain back below £200? Unlikely put possible.

its a guessing game which way fert or grain will go after xmas but my take on it is both are more likely to be higher or at least the gap will be the same , its post xmas harvest 23 thats where the day of reckoning could well be

 

[lloyd]

Generosity or bad marketing?

You know the answer to that question before you asked it.

 

[Renaultman]

its a guessing game which way fert or grain will go after xmas but my take on it is both are more likely to be higher or at least the gap will be the same , its post xmas harvest 23 thats where the day of reckoning could well be

Totally agree.

 

[DrWazzock]

I can’t see Europe having much N to export if things stay as they are. That just leaves CF. But a lot can happen in 6 months.

 

[David.]

I'm not stressing about it.
Sun will still be warm, even if grass is slightly less green.

 

[yellow belly]

This is the dilemma. Cash in an ISA/borrow some money to buy fertiliser? Sell some grain forward (into a drought!) to try to put a bottom in returns to pay it back.
Looks like Putin is playing silly beggars with the gas so I can’t see a time of stability in the short term.
I’m inclined to wait and see what happens. I don’t need it till next March. I’ve bought a bit of base recently to spread the risk. Just potash. Phosphate holiday here this coming year. Index is good.
Will await new season prices and see. But I’ve little appetite. Could be sitting here with it at half price by Christmas and grain back below £200? Unlikely put possible.

Use a flexible isa

 

[yellow belly]

The gas price is low enough now to make fertiliser if they want to

 

[jackrussell101]

When does new season prices come out?

 

[Planet Bee]

The gas price is low enough now to make fertiliser if they want to

show your calculations...

If you take Dutch TTF as a reference, on 1st June 2021 it was €18.32/MwHr. FX on the day was 1.163 so it's GBP £15.75/MwHr. AN was offered at £280 - £300 delivered onto farm

Today, Dutch TTF is €99 and FX is 1.19 = GBP £83.19

That's 5.28 times higher than last June. AN today is high £700's onto farm?

For comparison, US gas equates to something like €20 / £17/MwHr

 

[DrWazzock]

The gas price is low enough now to make fertiliser if they want to

Have we even begun to see the impact of reduced gas supply to Poland and possibly other big European fertiliser manufacturers? How long will this stupid game of chicken with commodities go on? Somebody will get badly burnt on the downside. Usually me.

 

[DrWazzock]

Big supplies of LNG coming from the States?
Putin gets assassinated?
Or not.
I can’t buy a bit now then some later. I only need a load.
How lucky do I feel?

 

[Tarw Coch]

I can’t see Europe having much N to export if things stay as they are. That just leaves CF. But a lot can happen in 6 months.

CF have two plants here so that’s good for supply for us.


Or at least it might be if one of them weren’t closed and the gas price so high

 

[Chae1]

My goodness, your a depressing bunch.

 

[bobk]

You know the answer to that question before you asked it.

Did you ?

 

[DrWazzock]

My goodness, your a depressing bunch.

Not really. Just trying to make a decision in unprecedented times.