‘Even if Iran war ends now, farmers’ costs will have to be passed on’
War in Iran Sparks Rising Costs for UK Farmers
The recent escalation of conflict in Iran has thrown the UK farming sector into turmoil, with growers facing mounting financial pressures. For Ali Capper, a representative of British apple and pear producers, the news of hostilities brought a wave of anxiety, as she anticipated the fallout on agricultural operations. The ongoing war has disrupted supply chains, driving up fuel and fertilizer expenses during a critical period of planting.
Fertilizer and Fuel Prices Surge
New estimates from The Andersons Centre, an independent agricultural research firm, highlight that farm operational costs have risen by over 7% in March compared to the previous year. This marks the first significant assessment of the sector’s overall strain since the conflict began. The firm, which also collaborates with the Department for Environment, Food and Rural Affairs, warns of a new “cost of farming squeeze.” A third of global fertilizer shipments typically pass through the Strait of Hormuz, now effectively closed due to the war, causing sharp price spikes.
Industry Warnings and Future Outlook
Ali notes that even if the conflict resolves within days, the financial toll is already embedded in the system. “Even if it all ends tomorrow, the costs are baked in now,” she explains. Red diesel, a key fuel for tractors and heating, has seen its price triple since December, while transport costs have climbed by 20%. These hikes threaten to force supermarkets to raise food prices, as growers struggle to cover expenses. The apple and pear industry had already endured a 30% production cost increase in 2022 and 2023 due to the Ukraine-Russia war, leaving many wary of further strain.
“We can’t go there again. There’s no flex in the system,” Ali says, recalling how the Ukraine-Russia conflict left some farmers unable to sustain operations.
Farmers Grapple with Eroding Margins
Ben Savidge, a potato farmer in Ross-on-Wye, Herefordshire, reports that red diesel costs have surged from 65-70p per litre to 96-105p, adding £5 per tonne to planting expenses. Though he’s managed to secure contracts at the start of the year, he’s concerned about margins being squeezed by consecutive challenges—drought in 2023 and now soaring energy prices. “It just feels like one thing after another,” he remarks.
“Last year we had an awfully dry summer which impacted yields drastically,” Ben adds.
Patrick Crehan, who manages fuel procurement for a 3,500-member agricultural consortium, notes that prices rose to 130p per litre before the ceasefire. While some have dipped slightly since Wednesday, many farmers now question whether their crops will be profitable. “We’ve had examples where they’d rather not plant at all,” Patrick says, emphasizing that the combination of fertiliser, energy, and fuel costs has made recovery unlikely for some. His company, AF Group, purchases approximately 120 million litres of fuel annually, underscoring the scale of the challenge.
Supermarkets Face the Brunt of Price Increases
Ali highlights that the burden of higher costs will eventually fall on consumers, with supermarkets deciding how much to raise prices. “It’s up to them how much they pass on to customers,” she says, reflecting the fragile balance between producers and retailers. As the war continues, the industry braces for sustained inflation, with the Food and Drink Federation projecting UK food inflation to reach at least 9% by year-end.
