Fertilizers are a major cost item for farmers, such as Kallepekka Toivonen In Nurmijärvi, Southern Finland. Toivonen on Sunday said According to YLE, tax-free prices for fertilizers have about doubled in the last 12 months.
“Worst of all, no one can say how long they will continue to rise,” he said.
The broadcaster stressed that other production costs have also risen – from energy prices and feed to construction and refurbishment. As demand for food increases and consumer purchasing power improves, cost increases can be passed on to consumer prices, according to PTT.
Price development in Finland has been relatively modest in 2021, especially compared to the EU average. However, rising costs throughout the production chain have a delayed effect on consumer prices due to the long duration of supply contracts between producers and distributors, he recalled. Jyrki Niemi, Professor of Agricultural Policy at the Natural Resources Center.
“The current agreements will practically last until the end of the year, which means that price changes are not expected before the beginning of next year,” he explained to YLE.
Niemi pointed out that the position of agricultural producers in the production chain is relatively weak, which makes them price takers. Rising fertilizer prices often lead many producers to reduce their use of fertilizers, leading to lower production volumes and higher consumer prices.
He added that the phenomenon is global and market prices for agricultural products will rise by more than a third this year. “It’s relatively fast growth,” he said.
While growth is particularly felt by low-income households, it may not be a completely negative phenomenon in the long run.
“Food prices do not include all the costs involved [food] causes of climate and environment. Therefore, prices are expected to rise more in the future than we have seen so far, Niemi emphasized.
Aleksi Teivainen – HT
Source: The Nordic Page