Fertiliser use across the country is down by 30% and may well indicate farmers' pasture production could be negatively affected and subsequently take several years to recover.
Farmers stinting on fertiliser use to conserve cash now mean that after the present recession the lost production could adversely affect returns.
A combination of record fertiliser prices last October, flagging commodity prices in the dairy sector and general recessionary malaise have prompted industry rivals Ravensdown Fertiliser Co-op and Ballance Agri Nutrients to confirm volumes are down by 25%-30%, including the all-important fertiliser maintenance programmes.
The two companies' national market share in the fertiliser sector is about 50:50 and they supply well over a million tonnes each annually, but Federated Farmers' president Don Nicolson is also cautioning farmers not to slash fertiliser programmes without first having pastures tested.
"If some farmers haven't done that [soil testing] analysis, then they will rue the day. In the medium term pasture production will decline," he said when contacted.
Cutting fertiliser use too much now meant it could take two to three years to recover, he said.
Ravensdown chief executive Rodney Green was contacted and said while farmers might see little effect when initially pulling back on fertiliser programmes, they had to have "perfect weather" to maintain required growth.
"This [volume downturn] has extremely concerning implications. It becomes a big issue when maintenance levels are 30% down," Mr Green said.
Either extremely cold, wet or dry seasons would prompt pasture growth during the "shoulder seasons" to fall off dramatically which would make it "very difficult for farmers to recover from".
He said the present decline in fertiliser use mirrored that of the 1980s when subsidies came off the farming sector and fertiliser use waned and "farms spiralled down, with some never recovering", he said.
Mr Nicolson said in the 1980s he was one of the farmers in his district "who could least afford fertiliser", however, he kept up the fertiliser programme and at the end of that recession had "one of the more productive farms in the area".
Ballance general manager of sales and marketing, Graeme Smith, highlighted the market volume had "dropped off markedly" since October, by around 30% also, and the companies had since dropped prices more than six times, but they had "stabilised" at the present levels he believed.
A hard season last year for beef and sheep farmers was mirrored again this year with Fonterra cutting its forecast for dairy-farmer payouts to $4.55 payout per kilogram of milk solids for 2009-10 - against a record $7.90 payout in 2007-08.
"Farmers are not planning on spending money [on fertiliser] until they get their own money in the bank," Mr Smith said when contacted.
Ballance staff were having to work harder to sell less, which in the future could impact on the service offered to farmers, such as soil testing.
On Thursday, Ravensdown dropped its urea price from $650 per tonne to $620, a price not seen since late 2007, and Mr Green of Ravensdown said a "new initiative" for "affordable" sulphur would be announced next week.
New Zealand Fertiliser Manufacturers Research Association, which is joint funded by Ravensdown and Ballance to address cross-sector issues, cautions that any decline in fertiliser maintenance programmes could have significant drawbacks in the long term, especially with unwanted pests gaining a foothold on farms.
Research association technical director Hilton Furness said "In general, you could get away with a reduction for a season. But if rainfall is also down that year, farms will not achieve the usual growth."
He said unwanted pests in grasses would be more difficult to control if maintenance programmes were cut.
"As a system runs down it will take much longer to build back up the soil nutrient levels," he said.
