NFUS calls for fertiliser market to face regulator

NFUS has called for the fertiliser market to be referred to Competitions and Markets Authority (CMA) following what they said are 'record profits' being posted by fertiliser manufacturers producing and supplying the UK market.

NFUS criticised the 'huge profits' recorded by fertiliser manufacturers in 2022 at a time when farmgate costs saw an 'unprecedented spike.'

Profits

They said they have been in contact with other UK farming unions including NFU, NFU Cymru and Ulster Farmers' Union about its concerns. 

NFUS intends to approach the CMA and the UK Government on the current state of the fertiliser market and the 'impact it has had on UK agriculture and food inflation.'

During 2022, NFUS said there was an 'unprecedented spike in fertiliser prices', peaking in July of that year at an 'average price of £841 per tonne for UK produced ammonium nitrate'. In July 2021, the average price for UK produced ammonium nitrate was recorded at '£326 per tonne and in 2020 the price was £206 per tonne.'

NFUS said recent analysis published by the Energy & Climate Intelligence Unit claimed the 'three biggest fertiliser suppliers in the UK made £5.45 billion in combined net profit in 2022, up from £909 million the previous year.'

NFUS president Martin Kennedy said: "For farmers and crofters, faced with an unprecedented spike in fertiliser prices, these figures reek of profiteering by a very small group of manufacturers.

Regulator

"We believe it is in the interests of the sector and the public that the CMA establish whether these profits are justifiable or have been achieved at the expense of not only our primary producers but also our hard-pressed consumers who are struggling with the cost of living.

"The scale of profits achieved is set against a backdrop of record gas prices, which fertiliser manufacturers identified as a major factor in driving price increases. One UK manufacturer also received significant taxpayer support in September 2021 to continue production as it indicated it would not be viable without government intervention.

NFUS said their own intention surveys, conducted in June and December 2022 indicated that the 'huge increase in production costs' involving fertiliser, fuel, energy, labour and animal feed were already having an 'impact on the production of high-quality home grown produce', with 'implications for our already fragile food security.'

A spokesperson for the Agricultural Industries Confederation (AIC) said: "It is important to note that the figures quoted by NFUS are global and therefore cannot be directly related to the UK market, which accounts for less than 1 per cent of global fertiliser sales. Crucially, these combined figures cover all products sold globally across a range of sectors, not just fertiliser.

"Despite the unprecedented levels of disruption seen over the past 18 months, the UK fertiliser market benefits from strong competition."