Farm inputs at a glance

September 2021

These figures show key changes in spending on-farm, looking at costs such as feed, fertiliser and fuel. For a visual representation, view the Farm inputs at a glance pdf showing the latest infographics at the bottom of the page.

Key farm inputs explained

Fuel

Oil has been strengthening as the global economy gets back on its feet after Covid. Although OPEC has come to an agreement to increase output, supply growth from elsewhere appears constrained. Any restriction on output whilst demand continues to increase will result in continued upward pressure on prices.

The oil price has dramatically increased over the past year, but the low demand in 2020 led to very low crude oil prices and percentage increases can give the wrong impression. Average prices for 2021 to date are lower than both 2018 and 2019 for the same period and the year overall.

In general, unsurprisingly, we see the same patterns in red diesel with prices for 2021 to date higher than 2020, but lower than 2018 and 2019 for the same period.

Latest fuel prices

Our fuel price tracker page features monthly price trends red diesel and crude oil.

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Power

European electricity prices achieved multi-year highs in 2021 Q2 from multi-year lows a year earlier. Power demand has recovered after Covid measures are lifted, in varying degrees, around the world. Sharp increases in European coal, gas and carbon prices have supported power plants’ marginal costs.

Strong gas prices are a result of tight supplies in the EU with some concerns about the ability of European utilities being able to fill storage in readiness for winter. LNG prices in Asia remain strong, with significant cooling demand, increasing global competition for cargoes. India's re-entry into the LNG market is futher adding to demand.

There continues to be a general bullishness about energy prices, but there is a need to keep this in perspective as, assuming no unforeseen circumstances, they are likely to reflect similar prices in 2018 and 2019.

Monitoring energy use

Explore news, guidance and resources focused on energy use on farm.

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Hay and straw

Current straw prices are still being driven by the restricted straw supply from 2020 harvest. This has led to continued increasing big bale straw prices with both wheat and barley breaking the £100 per tonne barrier in the early part of 2021. Prices have remained stable since then hovering around £105 per tonne for both wheat and barley straw.

Whilst planting for the 2021 harvest has not been as problematical as the recent past, there continues to be increased interest in no till, residual and straw incorporation cultivation techniques. If this continues there will be a downward impact on future straw supply.

The 2021 grass production year is likely to be good if the season continues as it has started. Early warm and dry periods followed by (prolonged) periods of rain has ultimately resulted in quantities of silage and hay. As long as harvesting has been timed appropriately there should be a good balance between quality and quantity.

Successful hay making will depend on sufficient days of rain-free weather. Big bale hay prices took longer to reach the £100 per tonne barrier but the April and May showers resulted in this price being breeched in May. Better weather led to a significant drop in demand and a resultant drop in price, with the first week of July reporting hay at £76 per tonne.

Overall silage and hay supply, and therefore the impact on hay prices, will depend on the success of later season cuts.

 

Latest hay and straw prices

Find out the latest prices for big bale hay, big square baled barley straw and big square baled wheat straw in England and Wales. 

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UK feed ingredient prices

Feed wheat

Feed wheat prices have been firm since the beginning of 2021. Prices have reacted to global trends and the tight 2020/21 UK crop. UK production is expected to be stronger in 2021/22, however reducing global production forecasts and adverse weather have supported prices so far. Prices will likely remain firm until yield confirmation is seen.

Feed barley

Feed barley prices were firm towards the end of the 2020/21 season. Strong demand and tight supplies for old crop barley has kept the market firm into the transition to new crop. With increased wheat availability barley demand is likely to be reduced, subject to diet composition, in 2021/22, which will drive an increased discount to wheat.

Maize

Strong Chinese demand and tight supplies kept maize prices strong through 2020/21. Maize supply demand is forecast to improve in 2021/22, which will keep maize prices down from 2020/21 levels. With harvests of maize later in the year, much is still to be determined.

Soyabeans

Much of the direction of soyabean prices going forward will depend on the demand picture from China.  In 2021/22 China is expected to account for almost 60% of global soyabean imports. Prices have been elevated in 2020/21 but the supply and demand outlook is expected to ease somewhat in 2021/22.

Latest UK feed ingredient prices

Check the weekly trends in prices for imported and domestically produced animal feed products.

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Fertiliser

Fertiliser production and pricing is impacted by the global fertiliser industry and the availability of raw materials. Raw materials, most notably for urea and phosphate, have been increasing resulting in global NPK prices rising sharply this year to reach multi-year highs.

Whilst AN is popular in the UK, the major global influence on the availability and pricing of nitrogen is urea. Currently we observe an unseasonal strength in prices as a result of several factors that have occurred at the same time. Strong crop prices, the influence of China, supply impacts, plant maintenance, and energy prices. In addition, there has been an impact on prices due to rising freight rates as availability has been tight for both vessels and containers for most of the year.

Crop prices are the underlying driver, with strong prices driving production and upwards nitrogen demand. China have been very active buying corn in the last 12 months as they rebuilt their pig herd and this has supported prices. They have also seen a domestic increase in urea demand for industrial use with a resultant impact on urea exports, affecting global supply.

There have been some urea supply issues caused by unusual events such as snow in Texas and winter storms. Supply has also been impacted due to expected new production in India, Russia and Iran still in various stages of build, with some countries’ ability to trade depending on trade talks and the impact of any sanctions. Russia accounts for about a third of global NPK supply and there has been a strong demand from the domestic market which limits export. Due to a good monsoon forecast and increased crop acreage there has been increased demand in India for much of 2020 Q2. We will now see seasonal demand from Latin America with buyers prepared to pay higher prices on the back of strong crop prices and strong demand in Eastern Europe with buyers securing product for autumn application season.

Globally, production has been impacted as there has been a higher rate of maintenance this year as a result of delayed maintenance in 2020 due to Covid. As countries have started to emerge from the impact of Covid, energy use has increased and fertiliser prices impacted by the very strong oil and gas markets.

In the future, the urea industry will need to look to address its environmental footprint but it is generally accepted that the industry will be able to make some significant changes to reduce their production impact. What this may mean for fertiliser pricing and when, we will have to wait and see.

The global fertiliser market is likely to remain a sellers’ market in the short term as fertiliser producers continue to increase prices due to the higher cost of raw materials. With continued tight supply and strong demand in the key production regions this will help maintain a firm market.

Argus predicts prices to be stable to firm over the next months. If new capacity comes onto the market by 2021 Q4 then prices should start to ease. If this continues there is predicted to be a correction downwards in 2022, probably after the spring season.

 

 

Latest fertiliser information

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Download the poster

You can download a handy A4 poster showing the latest farm input costs as at Summer 2021. Click below for your Farm inputs at a glance pdf.

More on markets and prices

Use this simple reference guide for updates on key market prices. There is also contact information for our market intelligence team.

Key Market Prices and Trends: July 2021

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