‘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
The outbreak of conflict in Iran has sent shockwaves through the UK farming sector, with growers facing unprecedented financial strain. For Ali Capper, a representative of British apple and pear producers, the news of the war came as a devastating blow. “I felt quite sick” upon learning of the escalation, she said, fearing the ripple effects on her industry. With the UK in the heart of its planting season, farmers are now struggling with rising expenses, as fuel and fertiliser prices surge due to the turmoil.
Cost of living crisis hits agriculture
Recent data from The Andersons Centre reveals that farm operating costs have increased by over 7% since last March, marking the first significant assessment of the conflict’s impact on the agricultural sector. The firm, known for its research supporting the Department for Environment, Food and Rural Affairs, warns of an ongoing “cost of farming squeeze.” Farmers report that they can no longer absorb these additional expenses, forcing them to pass them on to consumers.
“Even if it all ends tomorrow, the costs are baked in now,” Ali said. She anticipates higher prices for plant protection products and packaging, with the final decision on how much to raise consumer prices resting with the supermarkets she supplies.
Fertiliser costs have climbed by 40%, while red diesel—used for tractors, machinery, and heating—has spiked by 100%. Transport expenses have also risen, adding to the burden. A third of global fertiliser supplies typically traverse the Strait of Hormuz, which has been disrupted, leading to sharp price hikes. Red diesel’s surge is linked to the soaring cost of Brent crude, the global oil benchmark.
Ben Savidge, a potato farmer in Ross-on-Wye, Herefordshire, highlights the strain. “Red diesel was 65-70p a litre back in December,” he noted, but his recent purchases cost between 96p and £1.05p per litre. Despite the high costs, he has signed contracts with customers, meaning he must absorb the extra expenses for now. “It just feels like one thing after another,” he said, citing last year’s dry summer and this year’s energy price crisis.
“Last year we had an awfully dry summer which impacted yields drastically,” Ben added. “Now with our energy prices being hit like they have, it’s hard to see a way forward.”
Patrick Crehan, who manages fuel purchases for a 3,500-member farming consortium, shared similar concerns. Before the conflict, fuel costs averaged around 70p a litre, but they rose to 130p just before the ceasefire. While prices have slightly eased since the agreement, many farmers are already questioning whether their crops will be profitable. “Some would rather not plant at all and save money,” Patrick said, noting that the combination of fertiliser, energy, and fuel costs has made it unlikely for them to recoup expenses.
The Food and Drink Federation predicts UK food inflation will hit at least 9% by year’s end, even if the conflict resolves quickly. Ali warns that the agricultural sector is entering a new phase of pressure, with no room for flexibility after the Ukraine-Russia war already devastated operations in 2022 and 2023. “We can’t go there again,” she said, echoing the struggles of farmers who faced losses during the previous crisis.
With fuel consumption at 120 million litres annually, the consortium’s challenges reflect a broader industry dilemma. Patrick’s firm, AF Group, continues to monitor the situation, hoping for a turnaround as farmers push through the current hurdles.
