Urea stands out as the primary nitrogen fertilizer utilized extensively to boost crop production, particularly benefiting both wheat and vegetable cultivation.
“Over the past four years, we’ve witnessed a consistent rise in prices. Our production costs have surged by 25 percent or more,” he explained.
“Regrettably, the returns on our produce, including fruits and vegetables, have not followed suit,” he added.
Hamish McIntyre, the president of the National Farmers’ Federation, cautioned that this trend might lead to increased supermarket prices.
“Fertilizer costs are already escalating, with urea priced at approximately $US584 per ton, marking a nearly 30 percent increase in the past month and over a 50 percent rise compared to last year,” he noted.
“This is particularly troubling as farmers gear up for the winter planting season. The combination of dwindling supply and rising expenses could result in fewer crops being sown, eventually driving up food prices,” McIntyre warned.
Monash University professor of econometrics and business statistics Robert Brooks said the extent of the consumer impact would depend on when and how much the supply chain can bounce back from the conflict.
“A lot of primary production is already operating with fairly tight margins and they’re also operating in a situation where the planting and the growing cycle are seasonal, and so there are certain times where this becomes really time-critical,” he said.
“On the grocery price chain end, transport then becomes a bigger part of infrastructure, so the longer you get disruption, and the longer you get higher oil, petrol, diesel and urea prices, the more you get price stickiness.
“And we do know that aspects of the supply shock that came out of the Russia-Ukraine conflict are clearly part of the inflation that we face today.”
In a research note yesterday, Commonwealth Bank noted the crisis could last months and pose significant issues for agricultural production this year.
“While some of the best prepared farmers have most of their fertiliser needs purchased for the year, many don’t have it delivered onto their properties, leaving them at risk of future supply shortfalls due to shipment challenges,” economist Dennis Voznesenski said.
“On the fuel side, some of the best prepared farmers have sufficient purchases for a few months, but only partially delivered.
“Farmers with limited reserves could run into issues due to recent panic buying, with fuel rationing reported across different parts of the country.” 
“It’s going to make a big difference to your bottom line, because a lot depends on petrol and diesel,” he said.
”It’s very hard for us to pass that on when we’re the first ones in on the food chain.
“But if everything stops, no one gets to eat.”
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