Urea shortage to cause crop losses

El Nino predictions, unseasonal rain and a raft of economic and logistics factors have conspired to leave eastern seaboard farmers short of the popular fertiliser.

Farmers along the eastern seaboard of Australia are facing a major shortage of urea with some producers predicted to suffer crop losses while waiting until September for fresh supplies to reach the country.

The key driver of the shortage was the long-range El Nino forecast softening retail demand for the popular compound which led to a reduction in import orders over recent months.

However, unseasonal recent heavy rainfall across broadacre cropping areas saw remaining stocks depleted quickly as farmers clamoured to capitalise on the unexpectedly good growing conditions.

Grain Producers Australia southern region director Andrew Weidemann predicted the current shortfall was between 200,000 and 300,000 tonnes.

He said while most farmers had made a first application, many were waiting for shipments to make additional treatments.

Grain Producers Australia southern region director Andrew Weidemann. Picture: Dannika Bonser

“There is huge current demand, people didn’t expect the 200mm of rain in the Wimmera in April and July, that was out of the blue, normally it would be half that,” he said.

“But if the crop phase gets too advanced we will lose yield before the nitrogen goes on.”

He said many farmers took a calculated risk by not stockpiling urea with predictions of months of dry weather ahead.

Southern Grain Storage director Campbell Brumby said the situation was “frustrating” for farmers, stockists and importers, with the shortage extending for eight weeks.

“It is starting to alleviate a bit with vessels arriving but that is for consigned orders. We do not expect new orders to arrive until September,” he said.

Mr Brumby said traders had also been reluctant to order surplus stock given fluctuating prices internationally and that a sudden drying of the weather would see urea demand drop.

Fertilisers Australia chief executive Stephen Annells said fertiliser suppliers ordered urea based on growers’ contracts with normally a three to four-month lead time for shipping.

It is the second urea crisis in a year for after the Covid-era supply chain crisis constricted supply and increased costs.