Fertiliser pools offer many benefits

As farms start thinking about fertiliser purchases for next season, we outline the advantages of the Fram Farmers fertiliser pools, and hear from one member in Shropshire about the benefits that they derive from this method of purchasing a key input.

Over the last six years Fram Farmers’ fertiliser pools have become increasingly popular with members who wish to purchase this major input in a way that minimises price volatility within a buying season with a high level of certainty.

Managing risk has become much more important during the last decade and our fertiliser pools help members to do that, achieving excellent average prices across all products since their launch in 2013.

Unlike the grain sector, there is no highly-developed futures market for fertiliser, so prices cannot be fixed in advance, which increases risk. Fertiliser market dynamics have also changed significantly in the last decade. In previous years the market has started relatively stable and predictable, typically in June, with discounts for early ordering, and prices would then increase steadily throughout the year. This is no longer necessarily the case, with Brexit adding an extra layer of uncertainty to the coming season.

The uncertainty surrounding Brexit means that markets are currently unsettled

Markets can be exceptionally volatile, creating further challenges for farmers in making buying decisions alongside the multiple other demands on their time. Securing the best prices demands constant monitoring of the market which can be impossible for many. Being able to respond rapidly to market lows is also essential, as often the tonnage available at that price is limited and snapped up very quickly.

Expertise and constant involvement in the markets, coupled with committed tonnages, enables the fertiliser team to buy when prices are favourable. This puts them in a strong negotiating position with suppliers, so members benefit from attractive prices and lower risk.

The uncertainty surrounding Brexit means that markets are currently unsettled, with the potential to become particularly volatile as we go into the new season depending on fluctuations in exchange rates as well as economic and political pressures. With unsettled markets likely to continue,

PRE-HARVEST POOL. Solid lines: Pools. Dashed lines: Market. Nitram: gold. DoubleTop: blue. SingleTop: green. Lithan: purple. Granular Urea: red

POST-HARVEST POOL

the use of pools as a method to purchase inputs or market combinable crops is now a very relevant option to consider.

The fertiliser pools run from June to March, so grassland-based enterprises as well as arable farms can benefit. Participation is easy. A commitment form is enclosed with this issue, all you need to do is fill in your address, details of each product that you require and where you want it delivered.

Contact Catherine Coe, call 01728 727700 or email catherine.coe@framfarmers.co.uk

FERTILISER POOLS HAVE ALWAYS DELIVERED

Harry Heath

Harry Heath of M & J Heath from Newport in Shropshire is a firm believer in the benefits of Fram Farmers membership and of the cooperative’s fertiliser pools. A graduate of Newcastle University, Harry grows 200ha of wheat, barley and oilseed rape at Whitley Manor Farm and operates a 550-sow farrow-to-finish pig unit producing 14,000 bacon pigs per year. The business employs four full-time staff on the pig unit, one on the arable side and one other across the two sectors.

“We joined Fram Farmers principally to benefit from lower prices on animal health products, but subsequently discovered numerous other benefits and expanded our involvement. Now almost all our inputs are purchased through the cooperative, from fertilisers, crop protection, seeds and animal health products to machinery, spares and electricity. We also use the Fram Farmers marketing department to market our oilseed rape and, as we are only 40% self-sufficient in cereals, we source the balance through the cooperative.

“All the slurry from our pig unit is applied to the land, but there are times when the crops also need more readily-available nutrients, so each year we purchase two loads of Nitram (34.5%N) and one of DoubleTop 27N (30S0 3 ). In the past we did so through private merchants, but they are there to sell products and you cannot realistically expect them to provide independent advice. As an individual farm we have relatively little buying power, and the amount of time that I have available to monitor the markets is very limited, so gauging when was a good time to buy and what was a good price was very difficult.

“The other major advantages of Fram Farmers membership are transparency, trust and independent advice. Fram Farmers are totally transparent, we know that we can trust them absolutely and we receive completely independent advice from their sector specialists who constantly monitor the markets. For an individual farm, that alone is invaluable, but membership also allows us to benefit from the greater purchasing power of collective buying.

“The decision to participate in the Fram Farmers fertiliser pools for the first time in 2015 was taken because the markets had become very volatile. We have used the pools to source all our Nitram and DoubleTop requirements ever since and they have always delivered.”