‘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, stating she felt “quite sick” at the potential consequences for the UK agricultural sector. The ongoing war has disrupted the farming industry during its critical planting phase, driving up expenses for fuel and fertilizers. Ali, representing British apple and pear growers, notes that the two-week ceasefire announced to ease tensions arrives too late to prevent financial strain for this season. “Even if the conflict ends immediately, the financial strain has already been locked in,” she explains.
Costs Soar Amid Supply Chain Disruptions
Recent data from The Andersons Centre, an independent agricultural research firm, highlights a 7% rise in farm operational expenses this March compared to the previous year. This is the first indication of the conflict’s impact on the sector, as the group also collaborated with the Department for Environment, Food and Rural Affairs. The firm warns of a continued “cost of farming squeeze,” urging growers to prepare for sustained economic pressure.
Ali shares that fertiliser costs have surged by 40%, red diesel prices have doubled, and transport expenses have climbed by about 20%. A significant portion of global fertiliser shipments traverse the Strait of Hormuz, which has been disrupted during the conflict, causing sharp price increases. Red diesel, commonly used for machinery and heating, has also risen due to higher Brent crude oil costs. These rising expenses are directly affecting food production costs, with the Food and Drink Federation predicting UK food inflation could reach 9% by year’s end even if the war ends soon.
Struggling to Absorb Rising Expenses
“We will have to pass this on,” Ali says, emphasizing that supermarkets will determine how much prices increase for consumers. She notes that the apple and pear industry faced a 30% production cost hike in 2022 and 2023 due to the Ukraine-Russia war, calling it “brutal.” The current situation, she adds, risks repeating past challenges, as “there’s no flex in the system.”
Potato farmer Ben Savidge highlights the financial burden of red diesel, which has jumped from 65-70p per litre in December to 96-105p. While he’s absorbing these costs for now, his contract with customers may eventually require price adjustments. “Last year’s dry summer already hurt yields,” he says, adding that the combination of energy and fuel price hikes makes it feel like “one thing after another.” Still, he remains committed to planting, hoping for better outcomes later in the season.
Fuel Prices and Uncertainty
Patrick Crehan, who manages fuel purchases for a 3,500-member farming consortium, reports a 100% increase in red diesel costs. Before the conflict, he paid around 70p per litre, but prices rose to 130p just before the ceasefire. Although they’ve slightly eased since Wednesday, farmers are still grappling with the financial impact. “Some are no longer confident they’ll profit from their crops,” Patrick says, noting that many are considering delaying planting or reducing output.
Despite the challenges, most growers continue with their plans, telling themselves, “we’re just going to have to suck it up as we always do.” However, Patrick forecasts that “it’s highly unlikely they’ll see a return” from these costs, as fertiliser, energy, and fuel prices have climbed to unprecedented levels. The ongoing situation underscores the vulnerability of the agricultural sector to global supply chain shocks.
