The accelerated phasing out of derogation has a negative effect on the fertilizer market. The upward pressure on the collection contributions was already great due to a large supply of manure from cattle farmers and is now becoming even more acute. The situation is also unpleasant for pig farmers, although the manure supply from the intensive sector is not excessively large.
Friend and foe agree that the sales opportunities will be there after the fertilizer communication from Agriculture Minister Piet Adema certainly not getting any easier. Now that the buffer zones can no longer be included as placement space, an additional 2,5 to 3 million tons of cattle slurry may come onto the market. Intermediaries base their estimate on more than 65.000 hectares of buffer zones where manure will no longer be allowed to be placed, assuming approximately 40 tons of liquid manure per hectare. This probably pushes extra pig manure towards processing, as arable farmers generally prefer cattle slurry due to the higher organic matter content and especially the more favorable ratio of phosphate and nitrogen.
Nasty surprise
Adema's 'late' announcement is an unpleasant surprise for the fertilizer market. Regardless of the tightened rules, there was already a large supply of cattle slurry. This is partly an aftermath of last year when little manure could be spread in the autumn. In addition, high milk prices motivate people to keep extra cows, which has resulted in a significant increase in the supply of manure in many places. The situation varies per region, but an oversupply is noticeable nationally. The storage capacity is reaching its limits, insiders say. The storage problems for pig manure are much less acute due to the declining animal numbers.
Uncertainty at the start of the spreading season
An early spring would be desirable, so that full amounts of manure can be spread on grassland at the start of the spreading season (February 15). Last year the weather helped and collection contributions fell sharply. Regardless of the weather, intermediaries are anticipating higher collection contributions this year. Buyers are reluctant to secure a supply at fixed prices now that the market is so uncertain. The lack of clarity about the start of the spreading season on arable land also creates uncertainty. Formally this starts on March 16, but for a number of crops this will be earlier and an exception applies. Presumably also for 'area-consuming crops' such as potatoes, onions and grain. However, RVO has not yet provided a definitive answer on this, but promises to do so before mid-February.
Expected price drop less significant
In short: the only constant factor on the fertilizer market is uncertainty. In all this, the collection contributions for cattle and pig slurry are currently relatively stable. Cattle slurry prices briefly fell below €20 per tonne. Pig manure is above that limit on and in the South of the Netherlands. Depending on the weather, the downward movement will start from mid-February, but the collection contributions this year could easily be €3 to €5 higher than last year, intermediaries suspect. Especially when livestock farmers are going to be financially compensated, as advocates such as LTO opt for. The mitigating circumstances are the high fertilizer prices, which makes animal manure more popular among arable farmers, but this will not eliminate the pain of the higher collection contributions.