Price of phosphate rights shoots up

"The letter from State Secretary Martijn van Dam, in which he generic discount of 8,3% on phosphate rights has further fueled demand," says trader Ids Schaap of Phosfaatrecht.nu. "It's crazy. I'm getting calls from dairy farmers and traders asking if I have phosphate rights for sale. However, there is virtually no supply. That's quite frustrating when you get called dozens of times a day asking if you have phosphate rights. you have for sale and you have nothing."

Contracts for €175 to €180
The growing demand has consequences for prices. In the agreements concluded in the first half of 2017, in which growers took over the phosphate rights from stoppers, the prices were between €100 and €150 per phosphate right, confirms business advisor Jaap Gielen of Countus. Trader Henri Dunnink van Phosphate-rights.com in Schalkhaar says that prices have now risen considerably. "In May, €130 per kilo of phosphate was paid, now I conclude contracts for €175 per kilo."

Tight offer
A dairy farmer who wishes to remain anonymous says he has received an offer of €7.500 net per cow. That is €182 per kilo. Ids Schaap says that supply has been tight since March, which is why prices continue to rise. The last contract he concluded (a few weeks ago) already paid €180 per kilo. "Now I am offered prices of €200 per kilo. That is more than €8.000 per cow. For a highly productive cow you are talking about €9.000."

Stopping farmers wait
Just like Schaap, Dunnink has received frequent calls from dairy farmers or traders since Van Dam's letter asking whether he has phosphate rights. But the trader from Schalkhaar also has to say 'no'. "Stopping farmers see the price rising and are waiting patiently, although I expect that with these supply prices there will be more movement. Also from continuing dairy farmers who now hope to sell at a high price and are betting that they can buy back rights cheaply at a later stage. ." Schaap: "With bids of €200 or more per phosphate right, there will be more and more dairy farmers who want to sell now."

More to spend
Do both traders expect prices to become much higher? "I don't dare say a sensible word about it. It could go either way. What I see is that the milk price has improved a lot and the acute shortage of money has disappeared. Dairy farmers have money to spend again. At the same time, you see that the quitters are losing their phosphate rights. "Many sellers first want to wait and see the situation in 2018," says Schaap. Dunnink: "I do not rule out that prices will exceed the €200 limit. During the quota era, those kinds of prices or even more were also paid."

Tax-deductible
What will also play a role is whether or not the purchase of phosphate rights will be tax deductible. This is not currently the case, but political consultations are still taking place about this. If the rights become tax deductible, this will drive up prices considerably.