The High Price Of Energy Drives Up Agricultural Costs

Electricity, gas, agricultural diesel, fertilizers are some of the costs of agricultural and livestock farms in which in recent months there has been a rise in prices, which is practically doubling the usual expenses.

The products to be paid in the sowing plant are among those that are most concerned about registering the largest increases. In fertilizers, it is estimated that, with the rise, they will account for 77% of the CAP aid that will be collected in communities such as Castilla y León and Andalusia and somewhat less in Aragón and Castilla-La Mancha.

“In all the communities the sowing is beginning and it is outrageous because fertilizers are essential in agricultural work”, says Lorenzo Rivera, COAG coordinator in Castilla y León.

This community alone consumes around 1.10 million tons of fertilizers on average in the last ten years, representing a disbursement of 420 million to which must be added an additional 350 million due to the rise in prices. In total, the producers of this autonomy will have to allocate 770 million euros for fertilizer in sowing in autumn and spring. A fertilizer crisis in Europe threatens to send food prices through the roof

Fertilizer prices have risen an average of between 50% and 70%, going in some products from 150 euros to 300 euros per ton, although there are cases in which this increase has reached 80% or 100%like diammonium phosphate. In potassium chloride or the 15-15-15 complex, the increase has been 85% and 70%, respectively, while nitrogen fertilizers have grown more than 60%.

However, prices and the situation vary week by week, currently producing a 100% rise in practically all products and even more in some specific ones. Nitrogen nitrogen is not even being sold anymore, they clarify from COAG. Behind this price growth are the increase in demand -a 1% per year worldwide since 2011-, the price of gas and the increase in the cost of electricity and maritime transport, among others.

The rise is embittering the “sweet moment” that the countryside is experiencing due to the 20% rise in the price of cereal , which is being diluted. “The increase that we are supporting in fertilizers and fertilizers is abusive. In recent years, we have never experienced this situation. This year we had a little more joy for the good harvest and high prices, but nobody tells us how the next one will be. campaign “, above all, given this increase in costs, explains Donaciano Dujo, president of ASAJA Castilla y León.

This agricultural organization estimates that for an average rainfed farm of 200 hectares -with 150 hectares sown-, the cost increase compared to the previous campaign is 4,500 euros in fertilizers and 3,650 euros in diesel. In other words, the 2021 sementera would mean 8,140 euros more in a cereal farm than in 2020, an expense to which other costs that are also growing would also have to be added.

Stationary plants
The European Association of Fertilizer Manufacturers have explained that the “suffocating” prices are making the production of ammonia and fertilizers uneconomical, which is why several producers have announced in the short term complete closures or temporary reduction in the production of ammonia and fertilizers.

A situation that, if prolonged, could affect agricultural performance next year. In fact, “in England they have already closed two plants and another in the United States. In Europe, one has announced the dismissal of 40% of its employees,” says Lorenzo Rivera, from COAG Castilla y León.

The price of electricity has skyrocketed also in irrigation. “We are concerned about the failure of the Government to have two power fees – double irrigation rates – for irrigation times and another for those when it is not irrigated. The cost of power is burdensome because it is high although it is not water “they add from ASAJA Castilla y León. The electricity bill has risen in this case between 20% and 30% on average.

The costs of electricity, diesel and gas also have an impact on livestock. Dairy cattle are one of the most affected by this increase , especially that of electricity, whose consumption is key in the milking parlor and in the refrigeration tanks given the need to cool the milk to three or four degrees compared to the 40 degrees Celsius at which it is extracted.

“If before 500 euros were paid, now they are 1,000, while the price of milk does not reach 34 cents, ” says Román Santalla, head of livestock at UPA. Charo Arredondo, head of dairy and cattle at COAG and livestock, explains that “she milks two hours in the morning and two in the afternoon and has to cool the milk in the refrigeration tank, which consumes light and continues to operate at a temperature of three degrees until the milk is collected, and then all the equipment has to be washed for an hour in the morning and another in the afternoon with almost boiling hot water.

It shows at the end of the month that the costs are not covered, which have risen more 30% ” , a percentage that they foresee may have already risen to 50% with the week after week rise in prices.

The rise in the price of electricity, gas and diesel also “affects as a whole” pig farms , says Jaume Bernis, from COAG, especially for heating in farrowing and weaning areas and fans for the summer. In these types of farms, the energy bill has risen by around 30%.

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