THE decision by New Zealand’s largest fertiliser seller, Ravensdown, to buy a major stake in Adelaide-based fertiliser marketing company, Direct Farm Inputs (DFI), should help keep a lid on rising prices and also offer supplies to south-east Australian farmers on better financial terms.
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Ravensdown, a farmer-owned co-operative which supplies more than half the fertiliser used in NZ agriculture, had already spread its wings into Western Australia and Queensland before last month’s undisclosed but significant investment in DFI.
Leighton Huxtable (pictured right), DFI’s co-founder and a farmer from Karoonda in South Australia’s Mallee, said Ravensdown would now source all DFI’s fertiliser needs and ensure supplies were available in its outloading sheds at Port Adelaide, Melbourne, Newcastle and Brisbane all year round.
This meant trucks delivering grain to these ports could be back-loaded with fertilisers from DFI which would help cut transport costs and provide extra convenience and market pressure.
And with Ravensdown’s financial backing, DFI would now be able to offer forward orders for fertilisers at locked-in prices to replace the present practice of requiring farmers to pay upfront before delivery.
The new relationship with Ravensdown would also widen the range of fertiliser products offered by DFI.
Mr Huxtable said all the signs from the international marketplace suggested fertiliser prices would rise dramatically in coming months.
India, for example, was now buying all the fertiliser it could get.
Mr Huxtable and John Hurley, a Goondiwindi farmer and chemical manufacturer, launched DFI in December 2008 as a low-cost fertiliser supplier and almost immediately sparked a price war, which provided welcome relief for farmers from soaring prices.
DFI has distributed more than 150,000 tonnes this year, and Mr Huxtable hoped to double that figure next year with the help of Ravensdown.
“The synergies of a business owned and run by two farmers and farm input provider, Ravensdown, is an ideal recipe to add competition and see fertiliser prices remain as low as possible,” he said.
“We always intended to seek a strong established partner in the business, and this was backed by a survey of 5600 South Australian farmers last year.
“Our initial idea was to give customers the option of partial ownership. However, this would involve considerable capital investment, which we recognise is equally needed on-farm at the moment to increase production.”
Ravensdown’s CEO, Rodney Green, said the investment in DFI was the co-op’s third in Australia, following a merger with WA co-operative, United Farmers in 2008, and a supply venture with Canegrowers in 2009 to provide fertilisers to Queensland and NSW sugarcane farmers.
“We (Ravensdown) only move into areas where we can add value and ensure we protect the business for our existing shareholders,” Mr Green said.
