Australian Fertiliser Outlook 2024/25: Charting New Strategies To Thrive

In the last few years, economic shocks, Covid-19, the Russia-Ukraine war, and other factors caused fertiliser prices to hit historic highs. This triggered farmers to change farm practices, with many trimming fertiliser application rates. In Australia, fertiliser consumption in 2022 declined by 20% YOY, with different nutrients showing different magnitudes of reductions. For example, nitrogen showed a smaller cut than phosphate, potash, and sulphur.

Farm input costs began to decline substantially in mid-2022, allowing fertiliser affordability to improve close to historical levels despite significant drops in the prices of agricultural commodities like grains, oilseeds, beef, and dairy. Though the largest price relief came late in the buying period for the 2023/24 season in Australia, this improved affordability will likely prompt a recovery in demand and in application rates for the 2024/25 season. The gradual depletion of the soil’s inherent nutrient buffer and continued strong winter cropping area above the 23-million-hectare mark (if the weather allows for it) will further support a demand recovery.

This will likely also drive changes in the procurement strategies of Australian farmers and providers eager to secure more supply in the coming months and seasons. Anticipatory procurement is a strong contender for ‘budget saviour’ next season. In the longer term, the Paris Agreement will become a more important driver of the fertiliser market in the transition toward green energy.