Irish shoppers face further food price hikes as fertiliser costs double

Shoppers face further food price hikes as farm fertiliser costs have more than doubled this year, forcing producers to pass on the extra expense.

Russia's invasion of Ukraine and soaring natural gas charges have combined to drive up fertiliser prices at a time when farmers' demand for it is highest.

One supplier reported this week that the price of some products has risen to more than €700 a tonne from about €340 at the end of last year, while the Irish Farmers’ Association (IFA) says costs have trebled in some cases.

An IFA spokesman warned that farmers would have to pass on the extra cost, meaning that consumers could pay higher prices for food in the Republic’s supermarkets.

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The news comes just weeks after official figures confirmed that families are paying 6.5 per cent more for food than a year ago, while dairy products cost them a third more.

The IFA has already told leading supermarket chains, including Dunnes Stores, Musgrave's, Aldi, Lidl and Tesco, that the problem, along with rising fuel costs, means they will have to pay more for farmers' products.

“This is here and and now,” the IFA spokesman said. He explained that farmers are buying fertiliser now as this is the planting season, which lasts only for a few weeks.

“Fertiliser prices have trebled and you cannot grow crops without it,” he stressed.

The IFA’s spokesman added that the organisation believed higher food prices were inevitable, as most farms would not survive if they were unable to pass on the extra expense.

Invasion of Ukraine

Fertiliser and fuel are among farmers' biggest costs and prices for both have risen sharply since Russia invaded Ukraine.

Irish farmers import 600,000 tonnes of fertiliser a year, mainly nitrogen, potash and compound, which is a mix of products. Russia exports significant quantities of all three and is a large producer of compound.

At the same time, their manufacture uses large quantities of natural gas, the price of which hit a record £8 per unit in London earlier this week. “It’s all bound up,” the IFA’s spokesman observed.

Last year’s rise in natural gas prices forced up fertiliser prices. According to recent Central Statistics Office (CSO) estimates, the higher cost and increased demand boosted the Republic’s fertiliser bill by €58 million or 11 per cent to €591 million in 2021.

Farmers across Europe face the same problem. A report in Britain's Guardian newspaper on Tuesday stated that fertiliser prices there were heading for £1,000 sterling per tonne (€1,200) from £650 a week ago.

The UK’s National Farmers’ Union said prices for nitrogen fertiliser were already up 200 per cent.

British cereal growers said they could ease price rises by buying less fertiliser, likely to lead to lower production at a time when supplies from Ukraine, responsible for 12 per cent of the world’s wheat, are under threat.

Irish farmers use fertiliser on grassland, used to feed beef and dairy cattle, as well as for growing crops.

Consumers are already paying more at supermarket tills. The latest CSO figures show food prices were up 6.5 per cent in the 12 months to January this year.

The cost of dairy products alone had soared by 31 per cent over that time, the office said.

Inflation’s momentum has been growing since countries began emerging from Covid-19 lockdowns through last year.

Energy bills rose more than 27 per cent in 2021 as natural gas, widely used to generate electricity, began hitting new highs on world markets.

According to the CSO, inflation hit 5.5 per cent in December, meaning households were paying more than €105 for goods and services that had cost €100 a year earlier.

New-year sales and cheaper flights helped slow the rate in January, but figures for last month are expected to show it accelerating again.