“Wars are not good,” says the Wimmera farmer John Bennett from inside a workshop on his 10,000 hectare farm.
Bennett’s property is more than 11,000km from the strait of Hormuz, yet conflict in the Middle East is having a daily impact on his life.
He estimates increased fertiliser costs and delays spurred by blockage of the vital shipping lane could strip about $600,000 from his farm’s bottom line.
“Numbers are big in farming,” Bennett says. “Not a lot comes out at the end of the pipe.”
Made up of about 45% nitrogen and produced using natural gas, urea has become essential to modern cropping systems. For Bennett’s family-run farm between the townships of Kaniva and Lawloit near the South Australian border, wheat, barley and oats are rotated with lentils and faba (broad) beans that help replenish nitrogen naturally. In the winter growing season, synthetic fertiliser is the lever that lifts yields.
But the price of urea has nearly doubled since 1 January and is up about 75% since the start of the US-Israel war in Iran.
“That’s where a lot of the urea comes from because there’s plentiful supplies of natural gas,” Bennett says.
What once cost about $400-$500 a tonne in 2020 increased to $700-$800 with the start of the Ukraine war in 2021. Prices are now sitting at about $1,400, a rise that lands heavily on a 10,000-hectare grain operation already functioning on slim margins.
Bennett’s farm has grown from the 1,200-hectare property he and his wife, Allison, bought in 1995 into an enterprise that now operates like a “small factory”, engaging about 13 external businesses.
“This is urea,” he says, breaking clumps of a stream of the stark white, odourless pellets of the nitrogen byproduct using a metal rod as it falls from a silo on to a wide tray below. “We really need it to be growing high-yielding crops.”
Autumn marks the start of the winter cropping cycle in the Wimmera, and for the past month the Bennetts have been sowing wheat into some of the region’s shallow soils.
Earlier in the morning, Bennett had raked his hands through what he calls the Wimmera’s “worn-out” earth, land that has been worked hard for generations.
“Our topsoil is very shallow … in a lot of the better crop producing parts of the world their topsoil’s metres deep,” he says.
“Our yield is actually capped by not applying more fertiliser. That’s the crop which is the profit, really, at the end.”
It is not just the cost of fertiliser that is weighing on his calculations, but the cost of uncertainty itself. Bennett says he cannot lock in yield expectations without knowing if fertiliser will arrive, or what it will cost when it does.
His son Hamish, who manages procurement, describes a supply chain still rattled by global geopolitics. Some shipments have been delayed, others arrived at higher prices, with no certainty about what comes next.
“We bought a little bit of Chinese fertiliser … there was initially a hold-up because they turned that around, because they were looking after their own interests,” he says.
Further urea that Hamish secured at a higher price is expected in the country within a month or two, though he says “the jury’s out” on whether it will actually arrive.
Bennett says the Iran war has sharpened awareness of fertiliser security in Australia, with governments now engaging more closely with Asian suppliers.
“If people didn’t understand the seriousness at the start, they probably thought it would be over by now. But it [isn’t],” he says.
Both he and Hamish say the situation highlights Australia’s capacity to produce its own nitrogen fertiliser, noting the closure of the last urea plant on Gibson Island near Brisbane in 2023.
“We’ve got an abundant resource of gas,” Hamish says. “That’s all you need to make nitrogen.
“So it’s pretty criminal that it takes a conflict 10,000km away for us to realise we can’t make it ourselves.”
The Bennetts have built buffers where they can – more fuel and more fertiliser stored on-farm, more inventory held against disruption.
But even careful planning has its limits.
“We try to insulate ourselves against shocks,” Bennett says. “But no, we did not factor a war into our calculations.”
