Grain farmers have been dealt a winter blow, with some unable to access the urea they need for both canola and cereal crops. This will have a huge impact on yield, in particular to canola crops.

Many farmers in the south of the region were off to a difficult start to the cropping season anyway, with wet conditions making getting the crops in difficult. Many machines spent longer bogged than operating over autumn sowing, some simply gave up on the big airseeders and dusted off the smaller old drill still in the shed instead.   

Plenty of paddocks across the district remain waterlogged, some unable to be sown at all. Others went in late, with a good number of canola crops still at seedling stage at the start of August, when generally they would be running up to flower by now.

So what has led to this urea shortage? In short, the main driver is higher than expected demand. Not enough urea has been ordered for the country, and it is a slow process getting more ships on the way. In effect we are in a lag period; there is more urea available and it is coming, but it takes 3-4 months between being ordered and delivery, so a lot of it won’t be here until mid September.

The main reason for this underordering being that the weather has been far more favourable that predicted. Once again, the Bureau of Meteorology (BOM) has their ‘best guess’ at what the weather was doing and warned producers of a dry and hot winter. In which case, the demand for urea would be lower. No surprises the BOM were again well off base.

Unfortunately, in the meantime importers took heed of this advice and cut their urea orders. Growers were also hesitant to lock in supply, with world prices proving volatile and farmers not knowing if the price was going to drop further from the $600 odd per tonne it settled on.     

As good rains have continued in broadacre growing areas, the demand for urea has surged. Wimmera farmers planted their crops into good moisture, then they also had the bonus of receiving up to 200mm of rain over the early Autumn period. This has resulted in what could be bumper crops.. if nothing goes wrong from here.

As a result, retailers have been rationing urea supplies. Many growers are getting less urea than they would like, and some are going without all together. Crops that miss the vital winter application will simply not reach their full potential. Yields will be seriously compromised, particularly if the season dries out quickly and growers don’t have the chance to apply urea when it becomes available.

Once again, this situation highlights the vulnerability Australia faces in our reliance on imports. Following the closure of Australia’s only urea manufacturing plant in QLD last year, urea imports are at record highs, yet it still isn’t enough.

Whilst there is a plan in motion for Incitec Pivot to source 2.3 million tonnes of urea a year  domestically from near Karratha in WA, this plant will not be up and running until mid 2027 at the earliest. The big question is also can this urea be produced at a price that will compete with the world market? This remains to be seen, however simply the security of having a domestic supply will be reassuring for many.