New Zealand farmers are not alone in facing the challenge of striving for value while mitigating their environmental footprint. Senior reporter Richard Rennie is in Australia to find out how our neighbours are approaching the issues of gene technology, carbon farming and sustainability.
The New Zealand farm fertiliser market is heading for a shakeup with the arrival of Australia-based Marnco this autumn.
Marnco has established a solid base in Australia since its entry in 2018, claiming 20-25% of the Victorian and South Australian farm fertiliser market. Its primary supply source is through United States-based fertiliser distributor Nitron.
Managing director Mark Been said the NZ market is a natural progression from the eastern states of Australia, with the company able to negotiate reasonable shipping and transactional economies by working across the Tasman.
He appreciates that stepping into a mature market in NZ with two heavily entrenched farmer co-operatives is a bold move, but said that the timing is right.
“We feel we can deliver a low-cost, low-overhead model. We will not be everything to everyone, and our focus will be on bulk N, P and K, and doing it competitively.”
The NZ fertiliser market was about 1.6 million tonnes last year, a particularly low year after seasonal conditions and shipping issues impacted the industry in terms of both supply and demand.
Typically, the market runs at a longer-term average of about 2.1 million tonnes a year, comprising a third of nitrogen products, 40% phosphate and the remainder a combination of potash and combined fertiliser types.
Been has observed that the NZ market is heavily serviced with relatively dense depot locations in districts.
“But this also brings larger overheads, which can only be recouped through higher prices.”
The NZ fertiliser market shares some similarities to the likes of the telco and supermarket sectors, dominated by two large players with smaller operators on the edges.
“If this was the supermarket sector and Ravensdown and Ballance are Foodstuffs and Woolworths, then we are the Aldi.”
Been questioned whether farmer shareholders in the two incumbent operators are seeing the full value of participation in the co-ops and whether more value could be delivered directly through a company like Marnco.
He estimated fertiliser costs in NZ are 5-10% higher than in Australia, depending upon the product type.
The company has been working for the past eight months to set up in NZ, establishing bulk supply depots on the Genesis Energy coal-handling site at Mount Maunganui and another site in Timaru.
Access to port facilities is a vital component for a bulk fertiliser operator, and something the company has found easier to acquire in NZ compared to Australia, where port land is at a premium.
A ship is already on the water destined for NZ with 30,000t of phosphate, scheduled for arrival in March/April.
“At this stage we are looking at all our options when it comes to distribution, on both a B2B basis and a B2 farmer basis.
“We are confident there will be plenty of interest in what we are offering, which is a high quality, bulk product delivered efficiently and cost effectively for NZ farmers.”
In Focus Podcast: Better farming for a better future
This episode’s feature guest is Alison Dewes, a fourth generation dairy farmer and second generation vet from Bay of Plenty. She’s involved in a successful catchment group there and is an advocate for ground-up solutions to our environmental challenges and she tells me what she’s learned while helping lead a catchment group.
