THE AUSTRALIAN agriculture sector is pushing for greater development of home-grown fertiliser production facilities to protect the industry from price volatility and supply disruptions.
In light of rampant international supply chain issues, climate change concerns and rising demand from other agricultural nations, Grain Producers Australia said greater investment in Australian fertiliser manufacturing would help with more reliable access to a more sustainable product.
A recent Green Fertiliser Industry Roundtable hosted by GPA and Strike Energy, a business looking to manufacture urea in Western Australia, found locally produced fertiliser could help lower emissions, both directly and through a smaller transport carbon footprint.
GPA chair and Western Australian grain producer, Barry Large, said increasing the domestic supply of fertiliser products, by building local manufacturing plants represented a game-changer for farmers.
He said lower prices and greater certainty of supply would be a massive plus for the industry.
"The proof will be in the pudding ultimately, not only in the actual prices offered to producers, but increasing the supply of key inputs such as urea into the local market can only be a good thing," Mr Large said.
He said reducing the reliance on imports, given the instability of sea freight in the past 18 months was critical.
"It gives farmers more choice and generates better prices by being less reliant on imported urea, while saving on shipping and transport costs.
"This also reduces our exposure to price volatility in international markets, as we've seen lately with urea going from A$533 in January to A$978 now, which has a significant impact on the profitability of our $13 billion grains industry," he said.
Strike Energy are developing a processing plant at Geraldton in Western Australia's northern wheatbelt, that's aiming to produce and utilise green hydrogen to manufacture a greener urea product through an onsite 10 megawatt electrolyser.
Other local projects of promise include a urea manufacturing project at Leigh Creek in South Australia and a large-scale phosphate mine in north-western Queensland developed by Centrex Metals.
Strike Energy chief executive, Stuart Nicholls, told the roundtable his company was building the Geraldton facility to help cut Australia's urea imports, currently over $1 billion a year.
Australia currently imports about 95 per cent of its urea and the recent export restrictions from China and higher global gas prices have pushed up the cost of fertiliser for Australia farmers.
Mr Nicholls also said the Geraldton facility would catapult the Aussie ag sector to the top of the tree in terms of sustainability credentials.
"The Geraldton facility will also be the world's first "green" fertiliser factory, reducing the carbon footprint of Australian fertiliser by over 60 per cent," he said.
He said Strike Energy was looking at fully integrated model, buying in carbon sources from other industries, including agriculture.
"This creates an opportunity for other industries to dispose of their carbon and further helping the Australian economy develop new industrial capabilities and reduce our national emissions," he said.
The need for alternate sources of fertiliser was demonstrated in a recent ANZ Agri Commodities report that found the rise in fertiliser prices caused by a range of global events could have a number of ripple-on events to Australian farmers, and indirectly, to the local food supply chain.
Michael Whitehead, ANZ's Head Food, Beverage & Agribusiness Insights said: "The causes of the current spike in fertiliser prices could potentially stay active for some time, particularly given past comparisons.
"At the moment, global fertiliser prices have been pushed up partly due to the current high price of gas in Europe, which has caused some fertiliser manufacturers to either shut down or pass on the high input costs."
Depending on the flow-on effect of these global rises to Australian fertiliser suppliers, he said this could see many farmers re-evaluating their plans for the next year, particularly in terms of sheep and cattle stocking rates.
"Sheep and cattle producers may need to re-evaluate the impact high fertiliser costs will have on their bottom line, balancing up their forecasts for sheep, cattle and grain prices, versus increased input costs," Mr Whitehead said.
"It may well be that some livestock producers will choose to reduce their stocking rates, given the potential difference in pasture growth from reduced fertiliser application.
Start the day with all the big news in agriculture! Sign up below to receive our daily Farmonline newsletter.