According to Argus Media group, farmers are the first to suffer the effects of historical price levels of fertilizers, this in all the major grain production areas.
For French wheat, the Group estimates production costs would be up 21% over the 2022/23 campaign compared to 2021/22.
This is due to the costs of nitrogen fertilization, which would drop from $ 23 / t (€ 20.3 / t) to $ 65 / t (€ 57.4 / t) from one campaign to another.
In Ukraine , total production costs are reportedly up 9% for wheat.
“This difference with France is linked to the difference between the two agricultural models.
France produces more intensively , which implies more nitrogenous fertilizers, ”.
As for corn, the rise in fertilizer prices would cause production costs to skyrocket by around 19% in Ukraine and 14.5% in the United States.
This increase in production costs has upset the benchmarks for grain sales prices .
“For a French wheat producer, a decent selling price previously hovered around $ 220-230 / t (€ 194-203 / t).
Now it’s over $ 260-270 / t (€ 230-239 / t) ”.
Also, Argus-media group said that the increase in fertilizer prices should have a significant impact on the evolution of the 2022 rotations.
Indeed, its expects a decline in French wheat and corn areas, which are very nitrogen-intensive, in favor of less demanding crops like spring barley, sunflower, peas, soybeans.
In add, the high cost of nitrogen fertilization may cause some farmers to fertilize less, potentially affecting yields and quality.
That could means a drop in production for the next season, and therefore a drop in the availability of grain for the market.
On this wake the Group is therefore considering a drop of up to 10 million tonnes of wheat in the eight main exporting countries.
On the price side, Argus-Media said that the prospect of a drop in wheat and corn production pleads, more in favor of bull markets in the next season.
While, “with the increase in surface areas, we can on the other hand expect pressure on the prices of sunflower and barley”.
