‘The sums don’t add up’: UK farmers struggle as Iran war drives up costs
The war in Iran has triggered a sharp rise in fertiliser and fuel costs, putting pressure on UK farmers who must decide whether to plant or skip crops. With subsidies cut and global supply chains strained, many are rethinking their strategies to protect profits.
The first signs of spring are a welcome relief for farmers across the UK, but for many, the season is also a financial gamble. The recent escalation in the Middle East, sparked by US and Israeli strikes on Iran, has sent shockwaves through global trade routes, especially the Strait of Hormuz. This narrow waterway is a vital artery for the shipping of fertiliser, crude oil and gas, and its disruption has pushed prices for these essential inputs to record highs.
How the Iran Conflict Affects UK Farming
Approximately one‑third of the world’s seaborne fertiliser trade passes through the Hormuz Strait, according to UNCTAD data. When the shipping lanes were effectively closed at the start of the war, the flow of ammonia, nitrogen and sulphur – key ingredients for synthetic fertilisers – was halted. The cost of energy required to produce fertiliser has already risen, and with the supply chain bottleneck, prices are climbing even faster. Egyptian urea, a benchmark for the industry, has surged over 45% to $700 per tonne, up from $484 in late February.
Fuel is another casualty. Red diesel, the low‑tax fuel used by tractors and other farm machinery, is now being priced on a delivery‑day basis because suppliers cannot keep up with the volatility of the global oil market. Farmers who relied on predictable fuel costs are now forced to budget for a future that is anything but certain.
James Cox: A Case Study of the Current Crisis
James Cox owns a 230‑hectare arable farm on the edge of the Cotswolds. He has already applied the first dose of fertiliser to his oilseed rape crop and will soon plant spring barley. Cox’s tanks are full of diesel and heating oil, and he has a stockpile of fertiliser stored securely on the farm. However, he admits that the next purchase could be far more expensive, and he is unsure whether he can afford to top up his supplies.
“Not everybody will have got all the fertiliser they need, because of their finances and poor prices on the grain market,” Cox says. He points out that many of his peers have not been able to buy early, leaving them vulnerable as prices climb.
Subsidies, Cash Flow and the Future of UK Agriculture
The Basic Payment Scheme (BPS), an EU subsidy that helped farmers buy fertiliser in the past, has been phased out in England since Brexit. The new Sustainable Farming Incentive (SFI) aims to reward environmental stewardship, but its impact on cash flow is still uncertain. Farmers like Cox are now facing tighter budgets and are forced to weigh the cost of fertiliser against the potential revenue from their harvests.
In a climate of unpredictable weather, lower global crop prices, and the looming introduction of inheritance tax on agricultural properties, many are questioning whether it is worth planting certain crops. Cox is considering whether to use more fertiliser on his wheat crop to make it suitable for milling, but the premium for milling wheat is only £13‑£15 per tonne – not enough to cover the extra fertiliser cost.
Industry Response and the Path Forward
Some farmers are shifting to low‑nitrogen crops such as peas and beans, while others are experimenting with reduced fertiliser use. David Wilson, a crops specialist at Fram Farmers, notes that “there will be a point where people will consider if it’s worth planting the crop in the first place.” The National Farmers’ Union (NFU) has expressed concern about the impact of the Middle East conflict on UK food resilience and is urging the government to monitor supply chains closely.
Rachel Reeves, the Treasury Secretary, has warned that companies should not exploit the crisis for excess profits and has called on the Competition and Markets Authority to oversee fuel retailers and heating oil suppliers. The NFU president, Tom Bradshaw, emphasised that the UK’s ability to withstand global shocks is critical for feeding its 70 million consumers.
As the war continues, the UK’s food producers remain in a precarious position, balancing rising input costs against uncertain market returns. The outcome will shape not only farmers’ livelihoods but also the stability of the nation’s food supply.
What’s Next for UK Farmers?
Farmers are monitoring fuel and fertiliser prices closely and are considering alternative crop mixes to mitigate risk. The government’s role in stabilising supply chains and providing financial support will be crucial in the coming weeks. Meanwhile, consumers may see the effects of higher food prices as the cost of production climbs.
In the end, the war in Iran has turned a distant geopolitical event into a tangible threat to the UK’s agricultural sector, forcing farmers to make difficult decisions about planting, fertiliser use and overall profitability.
Why it matters
The rise in fertiliser and fuel costs threatens the profitability of UK farms and could lead to higher food prices, impacting both producers and consumers.
Key points
- Iran war disrupts Hormuz Strait, raising fertiliser and fuel prices
- UK farmers face tighter cash flow without EU subsidies
- Some are switching to low‑nitrogen crops to reduce costs
- Government and NFU are monitoring supply chains
- Higher input costs risk food price inflation
Frequently asked questions
Why is the Strait of Hormuz important for UK farming?
It is a key shipping route for fertiliser, crude oil and gas; its disruption increases global prices for these inputs.
What is the Sustainable Farming Incentive?
A UK subsidy that rewards farmers for environmental stewardship, replacing the EU’s Basic Payment Scheme.
