‘Even if Iran war ends now, farmers’ costs will have to be passed on’
Even if Iran war ends now, farmers’ costs will have to be passed on
Ali Capper, a fruit grower, was shocked upon learning of the Iran conflict. The news left her feeling “quite sick” as she feared the consequences for the UK’s agricultural sector. With the war disrupting global supply chains, farmers are facing rising expenses during a critical planting period. The recent two-week ceasefire, aimed at easing tensions, arrives too late to ease the strain on this season’s operations.
Cost pressures reshape industry landscape
According to The Andersons Centre, an independent agricultural research firm, inflation for farm operational costs has surged by over 7% this March compared to last. This marks the first comprehensive assessment of the conflict’s impact on the sector. The group warns of an ongoing “cost of farming squeeze,” as rising fuel and fertiliser prices threaten profitability.
“Even if the conflict ends tomorrow, the costs are already locked in,” says Ali, representing British apple and pear growers. She highlights that fertiliser expenses have climbed 40%, red diesel prices have skyrocketed by 100%, and transport costs are up around 20%.
Global fertiliser supplies, which often traverse the Strait of Hormuz, have been severely disrupted by the war. This has triggered sharp price increases for key agricultural inputs. Red diesel, essential for tractors and heating, has also seen its price rise due to the surge in Brent crude oil costs. These pressures ripple through the entire food production chain.
Industry faces uncertain future
Patrick Crehan, who manages fuel purchases for a 3,500-member agricultural consortium, notes that prices hit 130p per litre just before the ceasefire. Though slightly eased since Wednesday, the costs remain elevated. He reports that some farmers now doubt they can recoup expenses from their crops this year. “They would rather not plant and save money,” he explains, citing the financial burden of managing crops amid rising input prices.
Ben Savidge, a potato grower in Ross-on-Wye, Herefordshire, reveals that red diesel costs have increased by 40p per litre since December. This has raised his planting expenses by approximately £5 per tonne. While he has absorbed these costs for now, he hopes to renegotiate with his customers to offset losses. “Last year’s dry summer hit yields hard, and now energy prices are soaring,” he says, emphasizing the relentless pressure on margins.
“We can’t go through this again,” Ali adds. “There’s no flexibility in the system.” She recalls the challenges faced during the Ukraine-Russia conflict, which led to numerous farms closing or operating at a loss. The current situation, she says, feels like a repeat of those struggles.
The Food and Drink Federation predicts UK food inflation could reach 9% by year-end, even with the ceasefire. Ali anticipates further hikes in plant protection products and packaging costs, leaving the burden on supermarkets to decide how much to raise prices for consumers. As the agricultural sector braces for sustained financial strain, farmers like Ben and Patrick continue planting, hoping for a turnaround before the year concludes.
