Farming: NFU Scotland Calls for fertiliser market to be referred to Competitions and Markets Authority
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NFU Scotland is calling on the Competitions and Markets Authority (CMA) to examine the fertiliser market in the UK following record profits being posted by fertiliser manufacturers producing and supplying the UK market.
The Scottish union has been in contact with other UK farming unions – NFU, NFU Cymru and Ulster Farmers’ Union – about its concerns.
It now intends to approach the CMA and the UK Government on the state of the fertiliser market in the UK; the impact that has had on UK agriculture and the wider implications for food inflation.
During 2022, 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.
This week, analysis published by the Energy & Climate Intelligence Unit has claimed the three biggest fertiliser suppliers in the UK – CF Industries, Yara and Origin Enterprises - made £5.45 billion in combined net profit in 2022, up from £909 million the previous year and, according to the report: “…fertiliser company profits leapt 500 per cent in 2022, relative to 2020.”
NFU Scotland 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.
“We believe it is in the interests of the sector and the public that the Competitions and Markets Authority 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.
“We have contacted fellow farming Unions in the past few days, and we will also write to the UK Government on the matter next week.
“NFU Scotland’s 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.
“Building on Prime Minister Rishi Sunak’s ‘Farm to Fork’ summit in May, it is time we focused much more on our ability to produce our own food at an affordable price for our consumers.
"This starts with transparency across the whole of the food chain.
"We believe it is imperative that the UK government acts with a sense of urgency on this matter to avoid a further reduction in home grown food which will have ramifications for tackling food price inflation.”
Analysis of UK fertiliser prices paid by farmers and crofters can be found at GB fertiliser prices | AHDB.
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