2019 – definitely a very eventful year for agriculture and the environment July 2019
As I predicted late last year, 2019 has become an extremely eventful year. The pressure on agriculture and individual farmers to be seen to be reducing adverse effects on the environment has racheted up several notches. The sad thing is, this could and should have been seen coming by all major players in the industry. But the head in the sand approach continued to be exhibited by Federated Farmers, Fonterra (and the dairy industry in general), and the fertiliser industry. Farming is now the target of increasingly severe regulations and public scrutiny, which could have been avoided with a more intelligent approach.
One positive development has been the recent moves to take Overseer away from control of the self-interest groups like Ballance and Ravensdown, and give farmers control of their farm data. This will encourage much more independent advice being offered to farmers.
We must now focus on the root cause of most nutrient losses to the environment; the continuing over-use of soluble phosphate and extremely inefficient granular urea. Farmers must be able to source fertiliser types that are far less susceptible to being lost to waterways than are the traditional superphosphate and granular urea.
This is why I made the decision to get back into the fertiliser importing and distribution business. From my assessment, all the existing independent companies were small, and operate in small areas of the country only. None were in a position to supply true RPR at competitive prices throughout the country. Perhaps most importantly, none have the knowledge and determination to face up to the duopoly over the massive issue of phosphate and N pollution from soluble fertilisers. They are not attacked by the ‘Big 2’ because they pose no threat to them; in fact their mere existence is used as a positive by the ‘Big 2’ to ‘prove’ to the Commerce Commission that there is competition in the fertiliser industry.
But now, Quinfert is once again providing both RPR and blends of it with high-analysis soluble P (QSR) from one end of New Zealand to the other. On the nitrogen side, the extremely efficient ONEsystem (wetted, urease-inhibitor treated prilled urea) is now increasingly being recognised as being twice as effective as granular urea. Literally only half the quantity of N is needed, simply because the atrocious level of N losses to the environment from traditional granular urea are minimised. These initiatives haven’t made me very popular with the fertiliser industry, but nothing new there!
Farmers have their own businesses – their farms – to run. They cannot be expected to be fertiliser and environmental experts. It does disappoint me however that the farmer directors on the boards of the big companies are not demanding a great deal more information and ethical justification from management. If current management simply do not have the ability to face reality and act accordingly, they need to go. Visionaries who can take their staff with them down the triple-bottom-line path are needed before it is too late and their farmer shareholders are crushed with ever-increasing and expensive on-farm mitigation regulations that in most cases could be avoided simply be changing the forms of N and P we are using. And we must take far more serious steps to reduce cadmium (Cd) levels in phosphate fertiliser. The Fertiliser Quality Council’s ‘Fertmark’ limit of 280 mg Cd per kg P is far too high. We must stop using high-Cd Boucraa phosphate rock to make super; there are plenty of alternatives available, none of which are in illegally occupied territories like Boucraa.
Likewise, the selling price of high-Cd RPR like Sechura from Peru (approx. 300 mg Cd/kg P) should be greatly discounted. At least Ravensdown are blending it with Algerian low-Cd RPR. Ballance on the other hand continue dilute the Cd by mixing it with a low-Cd but agronomically totally unproven non-RPR! I said a year ago, when this was selling for $360/t, that it was worth less than $200/t. The last 6 months have seen reductions to $290/t and now $265/t, so we are getting there! And why buy high-Cd Sechura RPR mixed with low-Cd Algerian RPR for $320/t (North Island) and $360/t (South Island) when you can purchase true-blue low-Cd Algerian RPR from Quinfert for the same price? And you get an immediate rebate on purchases from Year 2 as a client.
Food for thought?
Updated 24 July 2019