MUNICH (dpa-AFX) - High gas prices and the Russian war of aggression against Ukraine have had an unexpected side effect on the environment: fertilizer sales in Germany have fallen sharply. This is according to data from the Federal Statistical Office. Farmers have also been reluctant to buy fertilizer so far this year, according to Munich-based Baywa, Germany's largest agricultural retailer. One possible consequence is poorer harvests. But this is presumably also accompanied by lower nitrogen inputs in groundwater.

The three most important types of fertilizer are nitrogen (N), phosphate (P) and potassium (K), which are offered in various concentrations and mixtures in agricultural trade. Nitrogen is a staple for plants and the most important fertilizer in terms of quantity. In the 2021/22 marketing year, sales fell by 13 percent to 1.1 million metric tons, according to the German Federal Statistical Office.

In the case of phosphate fertilizers, the Wiesbaden-based authority reported a 40 percent drop in sales to just under 115,000 metric tons. In the case of potash, the figure was 306,000 tons, a drop of 31 percent. Fertilizer sales have been declining for years, but such sharp drops are exceptional.

"Fertilizer prices had already more than doubled in the fall of 2021 - before the war in Ukraine began - and had reached a utopian high price level," says a spokeswoman for the Bavarian Farmers' Association in Munich. The main cause was the sharp rise in gas prices, which had already begun before the Russian invasion. "Gas is mainly needed as a raw material for the production of nitrogen fertilizer," she said. "Against this background, fertilizer manufacturers had cut back production or shut down plants in the meantime."

The Russian invasion then meant another price shock for the fertilizer market. For farmers, this initially seemed less painful than feared at the beginning of the war. "Producer prices for wheat have also risen since the end of 2021 and have been so high that in most cases fertilizing has been worthwhile for farmers despite the high costs," says Torsten Kurth, an agricultural expert at management consultancy BCG. "The most important crop in Germany is wheat, and the producer price in 2019/2020 was below 200 euros per ton. That skyrocketed to over 400 euros per ton at its peak after the Ukraine war began."

But the price explosion didn't last. In the spring of 2022, there were even fears that certain types of fertilizer would become scarce, but the opposite has happened. "Since the fourth quarter of 2022, we have seen falling fertilizer prices," says the Baywa spokeswoman in Munich. "This is due to several factors: lower energy costs and thus lower production costs in fertilizer production, restrained demand from farmers and thus an oversupply of fertilizer in the market."

Farmers, who took the precaution of stocking up last year in anticipation of sustained high fertilizer prices, are now in an unpleasant position. "Producer revenues for grain and oilseeds have fallen steadily since the beginning of the year," says the Bavarian Farmers' Association. According to the report, the price of wheat in Bavaria is currently between 230 and 250 euros per ton. "Many farmers are now faced with the situation of producing with very expensive fertilizer at sharply reduced grain revenues."

Less fertilizer in the fields is not only convenient for environmental authorities. Drinking water suppliers, food manufacturers and beer brewers should also be grateful. Elevated nitrate levels in groundwater are not entirely due to agriculture, but fertilization is a contributing factor.

Compared with the 2010/11 marketing year, sales of nitrogen fertilizer in Germany have already fallen by almost 690,000 metric tons, without a corresponding shrinkage in harvest volumes. Environmentalists see this as evidence that too much fertilizer has been used for decades. So far, it is unclear when further reductions will actually lead to poorer harvests. "Yield and quality losses are to be expected," says the spokeswoman for the Bavarian Farmers' Association.

The EU wants to reduce fertilizer use by 20 percent, says Benjamin Subei, who specializes in agriculture and sustainability at management consultants BCG. According to the consultant, environmental requirements and cost pressures are equally incentives for farmers to invest in technology instead of chemicals: "As a result, and due to higher prices, farmers are motivated to use technologies such as precision farming to reduce the amount of fertilizer while keeping yields stable."

For example, nitrogen levels in the soil can be measured or detected both with "N sensors" in the field and with the help of Earth observation satellites, allowing farmers to avoid overfertilization. However, such high-tech methods initially mean expensive investments for farmers.

At the same time, Europe is becoming more dependent on fertilizer imports - actually, the EU wants to achieve the opposite. But the chemical industry is suffering particularly from gas prices, which are very high by international standards. For example, several European manufacturers have cut production of ammonia, a basic ingredient for fertilizers.

Accordingly, imports of nitrogen fertilizer to Germany have risen rapidly, as reported by the German Agricultural Industry Association with reference to EU statistics. According to the report, a total of 350,000 tons of three types of nitrogen fertilizer were imported from July 2022 to January 2023 - almost nine times as much as three years earlier./cho/DP/he