‘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

UK Growers Grapple with Soaring Expenses Amid Regional Conflict

Fruit producer Ali Capper described a sense of dread upon learning of the war in Iran, likening her reaction to feeling “quite sick” about its consequences for the British farming industry. As the conflict unfolds, agricultural operators are confronting sharply rising expenses, particularly in fuel and fertiliser, which have disrupted operations during critical planting periods.

“No matter how swiftly the situation resolves, the financial strain has already settled into our costs,” Capper remarked, representing British apple and pear growers. She highlighted that the current costs are locked in, making it impossible to reverse their impact regardless of the war’s timeline.

New analysis from The Andersons Centre, an independent consultancy, marks the first assessment of the agricultural sector’s overall burden since the conflict began. The firm, which offers insights to various farming organisations and has conducted studies for the Department for Environment, Food and Rural Affairs, warns of a “cost of farming squeeze” that could persist.

Fuel and Fertiliser Prices Skyrocket

Ali noted that her fertiliser expenses have climbed by 40%, while red diesel prices—used for tractors and heating—have surged 100%. Transport costs have also increased by 20%, driven by the disruption of the Strait of Hormuz, a key route for a third of the world’s fertiliser supply. This bottleneck has caused prices to spike dramatically in recent weeks.

“We can’t go back to the previous situation. The system has no room to adjust,” she added, recalling the sector’s struggles during the Ukraine-Russia conflict. “Many farmers lost money or closed down then, and now we’re facing the same pressure again.”

Red diesel, a critical resource for agricultural machinery, has seen its price climb due to the soaring cost of Brent crude, the global oil benchmark. Patrick Crehan, who manages fuel procurement for a 3,500-member farming consortium, noted that prices rose from 70p to 130p per litre before the ceasefire, though they have since dipped slightly. Despite this, he reports that some growers are abandoning plans to plant crops, fearing they won’t recoup their investments.

Industry Outlook and Challenges

Ben Savidge, a potato farmer in Ross-on-Wye, Herefordshire, estimates that planting costs have risen by £5 per tonne because of the elevated red diesel prices. “Last year’s dry summer already damaged yields, and now energy costs are adding another layer of pressure,” he explained. While he has locked in contracts with customers, he hopes to renegotiate prices as margins shrink.

Crehan suggests that even with the ceasefire, the UK’s food inflation is projected to reach at least 9% by year’s end, according to the Food and Drink Federation. Farmers like Ali are also bracing for higher costs in plant protection products and packaging, with final pricing decisions resting on supermarket partners.

Capper stressed that the agricultural sector is under siege from multiple fronts, including the war in Ukraine and now the conflict in Iran. “We’ve already endured a 30% production cost increase over the past two years, and this is just another blow,” she said, underscoring the urgency of addressing these challenges before they compound further.