Loss of derogation puts pressure on fertilizer market for years

The loss of the derogation will put extra pressure on the distribution market and processing capacity in the coming years. The increase in the extra supply of cattle manure is calculated for 2023, 2024, 2025 and 2026 at: 1,7 million tons, 3,3 million tons, 7,9 million tons and 11,5 million tons, respectively. These results only include the effect of loss of derogation without other new policies or measures at company level.

In 2020, 92% of the national nitrogen placement capacity was used with animal manure. The remaining space is in the arable areas. In these areas, sales are still possible for a maximum of 7 million tons of cattle manure. In 2020, the southwestern arable area offered additional sales opportunities for almost 3 million tons of cattle manure. Over the next two years, the extra manure supply can be sold through existing manure distribution. This sales channel does not require additional investments, unlike more manure processing. Manure separation can reduce the volume of cattle manure supply by about 20%. The nitrogen surplus then becomes available with the nitrogen-rich liquid fraction. The solid solid fraction with phosphate and organic matter remains on the farm as much as possible for fertilization. More manure supply does increase the pressure on the manure market and with it the manure disposal costs.

More processing of pig manure
Arable farmers generally prefer the use of cattle manure over pig manure. Displacing pig manure means more processing of pig manure. In the first place, processing is dependent on existing manure processors. More processing capacity with new licenses will probably take too long. In addition, hopes are pinned on a rapid start-up of large biogas installations. These then offer solace as an extra sales channel for manure. The digestate can be processed at the installations into high-quality end products (export, rental fertilizers). In this way, the great need for green gas gives a boost to manure processing.

Uncertain fertilizer market in the longer term
In the longer term, the new manure policy and the provincial area-specific plans for nitrogen, water and climate will mainly determine, as will the autonomous developments in livestock farming, how great the need for manure distribution and processing will be. Only when the consequences of all goals in (area-oriented) plans are known, can the consequences for the fertilizer market be better estimated. At the moment there is great uncertainty about how much and which manure (products) will be offered and demanded on the manure market within new frameworks.

Calculation of the extra fertilizer supply
The average derogation standard of 243 kilos (250/230 kilos) has been phased out for 2023 to 2026. The fertilizer use in 2020 on the derogation farms in the derogation monitoring network was 236 kg nitrogen per ha. With this quantity as a starting point, a translation has been made to the derogation area of ​​753.338 hectares in 2021 (16.869 companies). Below are the calculations for the extra removal of cattle manure.

¹) Transported cattle manure contains an average of 4,3 kilos of nitrogen and 1,5 kilos of phosphate per tonne (RVO, 2021)

Jaap Uenk

Jaap Uenk is the owner of consultancy Mestem and has more than 40 years of experience in various positions in the Dutch fertilizer sector.

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