‘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, expressed shock upon learning of the Iran conflict, fearing its effects on the UK agricultural sector. The outbreak of war during a crucial period for planting has left many in the industry facing unprecedented financial strain, with fuel and fertilizer prices soaring rapidly. While a two-week ceasefire offers hope for resolution, Ali insists it comes too late for the current season. “Even if it all ends tomorrow, the costs are already locked in,” she noted, representing British apple and pear producers.
New data from independent analysts The Andersons Centre reveals that inflation for farm operations has surged over 7% in March compared to the previous year. This marks the first assessment of the conflict’s broader impact on agriculture, highlighting concerns of another “farming cost squeeze.” The National Farmers Union has echoed this, stating that producers cannot cover additional expenses and will likely have to raise prices as a result.
“We can’t go there again. There’s no flexibility in the system,” Ali said, recalling how the Ukraine-Russia war had already devastated the sector with a 30% production cost increase in 2022 and 2023. “When I heard the conflict had reignited in Iran, I felt quite sick.”
Ali’s farm in Worcestershire has seen fertilizer costs climb by 40%, red diesel prices jump 100%, and transport expenses rise by about 20%. These spikes are tied to the Strait of Hormuz, a key route for global fertilizer shipments, which has been disrupted by the conflict. Red diesel, used for machinery and heating, has also skyrocketed due to higher Brent crude prices.
Patrick Crehan, who manages fuel purchases for a 3,500-member farming group, reported prices climbing from 70p to 130p per litre before the ceasefire. Though costs have eased slightly since Wednesday, many farmers remain wary. “Some are now questioning if they’ll profit from this season at all,” he explained. “They’d rather avoid planting and save money, knowing the expenses will be too high.”
Ben Savidge, a potato grower, shared similar concerns. His red diesel costs have risen from 65-70p to 96-£1.05 per litre, adding £5 to planting costs per tonne. While he’s currently absorbing these expenses under a pre-agreed contract, he hopes to renegotiate with his buyers as margins shrink. “Last year’s dry summer hurt yields, and now energy prices are pushing us further,” he said.
The Food and Drink Federation predicts UK food inflation will hit at least 9% by year-end, even if the war concludes soon. Ali anticipates further hikes in plant protection products and packaging costs, emphasizing that supermarkets dictate final price adjustments. “We’ll have to pass these on to consumers,” she said, underscoring the delicate balance between producers and retailers.