Approach on forward purchase option
5 July 2011
NZ GROUNDSPREAD FERTILISER ASSOCIATION
The New Zealand Groundspread Fertiliser Association (NZGFA), is to approach the two fertiliser co-operatives, Ballance and Ravensdown, to discuss a forward purchase option for fertilisers as practiced in Australia.
With the Australian model farmers could enter into a contract to purchase fertiliser six months in advance and know the price they would be paying for it.
NZGFA President, Stuart Barwood, said a scheme where farmers could pre-purchase fertiliser at a pre-determined price would be good for the farmers, the fertiliser spreaders and the fertiliser companies.
“We have massive problems with fertiliser quality at peak times during the season,” Stuart Barwood said. “If the companies could better plan production the fertiliser quality would improve and be consistent. Further, it will mean the product will be there when farmers wanted it.
“That means it would spread more accurately and farmers would get more bangs for their fertiliser bucks. All they would need to do is better plan their fertiliser usage.
“The fertiliser companies would know their cash-flow and their production requirements.
“I know Ballance is trialling such a scheme in Canterbury but we would like to see it rolled out over the country,” Stuart Barwood said.