Surging Urea Prices: Impacts on Australia’s Cattle Supplement Feeding

Price Surge Driven by Supply Disruptions

A significant stock lick supplier in Queensland has reported an alarming
86 percent increase in urea prices, a critical component of supplementary animal feed.
This rise stems from supply disruptions originating in the Middle East and exacerbated
by export restrictions from China.

A Shift to Imported Urea

Since the closure of Australia’s last urea production facility in Queensland in 2022, the country
has increasingly depended on imports. Following the recent events in China, politics and conflict
in the Middle East have intensified these challenges, leading to notable increases
in costs.

Supplier Insights

Jack Jones, owner of livestock nutrition supplement business Nutri-Lick, reported,
“We received a new price list recently, and prices have surged by $780, continuing to climb
weekly alongside rising fuel levies.” He detailed that the cost of urea has jumped from around
$850 to $1580 per tonne in just two weeks, highlighting the steep increases that farmers are facing.

The Role of Urea in Supplementary Feeding

Urea plays a vital role in enhancing the protein content of supplementary feed, especially during
dry seasons. Mr. Jones explained, “Urea contributes about 287% equivalent crude protein per kilo into
a tonne of feed, proving essential for boosting the weight and performance of livestock during
dry periods.”

While the inclusion of urea is not necessary in wet-season mixes,
it is critical in dry mixes where it ranges from 5% to 20% depending on the specific needs and
conditions of the farming operation.

Future Supply and Pricing Challenges

Despite the challenges, suppliers have reassured that the stock feed sector is prioritized for
prilled urea supply, crucial for dry lick production. Mr. Jones advises farmers to stock up on supplies
now, as further price hikes seem inevitable.

“Our advice to customers is to get it in the shed now because we don’t know what the next tonne
of lick is going to be worth,” he stated.

Government Urged to Take Action

In a related context, Shadow Minister for Resources and Northern Australia, Senator Susan McDonald,
has called on the Federal Government to expedite the development of the Perdaman urea plant to mitigate
the impacts of the ongoing supply crisis.

Senator McDonald emphasized the urgent need for actions that can ensure Australia achieves
self-sufficiency in urea production, potentially replacing up to 90% of imports. She also
urged immediate governmental actions to mobilize resources for the project’s completion by January 2027.

Conclusion: Navigating the Future

While farmers face escalating costs, the continued profitability of feeding
supplements amid these rising prices remains vital for successful cattle management.
“Even with the elevated price, it’s still profitable to feed supplements at the moment,” said Mr. Jones.
However, it is evident that urgent and proactive measures are necessary to secure Australia’s agricultural
future and ensure the well-being of regional economies.