Source: Zerno On-Line (Russia)
Australian wheat farmers may reduce plantings during the next planting season due to growing Australia wheat fertilizer shortage concerns, Grain On-Line reports, citing Bloomberg.
Fertilizer Supply Challenges
Wheat is a nitrogen-intensive crop. Moreover, fertilizer use is a key factor in yield. With exports through the Strait of Hormuz significantly hampered, fertilizer prices are rapidly rising globally. Additionally, supplies are becoming increasingly difficult to find.
The fertilizer shortage comes amid low wheat prices and ample global supply. In fact, this had been causing farmer discontent even before the US-Iran conflict. Winter crop planting in Australia is scheduled to begin in the coming weeks. Consequently, farmers are considering planting fewer grains and more oilseeds and legumes in hopes of higher profits.
Farmer Perspectives on Crop Changes
“They’ll basically just cut back on wheat and replace it with everything else, including lentils, canola, and barley,” said Vitor Pistoia, senior grains and oilseeds analyst at Rabobank.
Arthur Giron, a Queensland farmer, agreed. He said he typically splits his winter crops equally between wheat and chickpeas. This year, with fertilizer scarce and expensive, he plans to eliminate urea and reduce wheat plantings to 20% of his total acreage.
“Wheat prices are terrible because there’s a global glut,” Giron said. “Other crops have better growth potential.”
Australia Wheat Fertilizer Shortage Concerns and Export Implications
Australia exports wheat primarily to Southeast Asia, the Middle East, and China. Last season, the country harvested its third-largest wheat crop. As a result, this exacerbated concerns about oversupply.
However, farmers are increasingly concerned about access to diesel and fertilizer following the US-Israeli attacks on Iran. Furthermore, Australia relies heavily on trade through the Strait of Hormuz. These difficulties prompted the government to conduct a review of the country’s food security. Subsequently, on Monday, Agriculture Minister Julie Collins announced a national supply chain assessment.
During a recent tour of South Australia, Vitor Pistoia noted growing concerns among crop farmers about access to essential resources. Therefore, many are considering changes to their upcoming crops. Legumes such as lentils are attractive to farmers because they don’t require large amounts of fertilizer. In addition, farmers are shifting to oilseed crops such as canola, which command higher prices than wheat.
In Australia, winter crops are typically harvested late in the year, from October to December. Thus, decisions farmers make now about planting acreage could impact global supplies in 2027. December Chicago wheat futures, the global benchmark, have risen slightly since the start of the military operation in Iran. Meanwhile, the May contract is virtually unchanged. This potentially signals to traders that supplies will tighten later this year.
Pistoia said that while most farmers have received some fertilizer for their winter crops, many have not yet fully met their needs. “The strait should be opened by the end of April to ensure that fertilizer arrives on time and does not significantly impact yields,” he said.
