‘Even if Iran war ends now, farmers’ costs will have to be passed on’
Post-Iran Conflict, UK Farmers Face Persistent Cost Challenges
News of the Iran conflict’s outbreak sent shockwaves through the UK agricultural sector, with Ali Capper, a representative of British apple and pear growers, describing the situation as “very worrying” for the industry. The war has disrupted supply chains, driving up expenses for essential inputs like fuel and fertilizers during a critical planting period.
Rising Expenses and Inflation Pressures
Farmers are now contending with inflation rates in farm operational costs that have surged by over 7% since March of last year, according to data from The Andersons Centre. This marks the first significant assessment of the agricultural sector’s toll since the conflict began, highlighting a new “cost of farming squeeze” as prices for critical resources continue to climb.
Impact of Fuel and Fertilizer Price Hikes
Ali Capper notes that her fertiliser costs have skyrocketed by 40%, while red diesel—used for machinery and heating—has doubled in price. Transport expenses have also risen by approximately 20%. These increases are partly attributed to the Strait of Hormuz, a key route for a third of the world’s fertiliser, which has been disrupted by the conflict.
“Even if the war ends tomorrow, the financial burden is already locked in,” says Capper, emphasizing the lack of flexibility in the current system.
Red diesel prices have been driven by the global rise in Brent crude oil, which serves as the standard for oil markets. These soaring costs are directly affecting the affordability of food production, with the Food and Drink Federation predicting UK food inflation could hit at least 9% by year’s end, regardless of the conflict’s resolution.
Struggles in the Face of Uncertainty
Potato farmer Ben Savidge reports that red diesel costs have surged to between £96 and £1.05 per litre, compared to 65-70p in December. Though he has secured contracts with buyers, he admits absorbing these additional costs is challenging. “It feels like one crisis follows another,” he says, citing a previous summer drought that slashed yields and now compounded by energy price hikes.
“We had a brutal year from the Ukraine-Russia conflict, and now this is just another blow,” Capper adds, recalling how many growers faced losses or closures during that period.
Patrick Crehan, who manages fuel purchases for a 3,500-member farming consortium, highlights the financial strain. Fuel prices climbed to 130p per litre before the ceasefire, though they have slightly eased since. Farmers are increasingly reluctant to commit to planting, with some considering abandoning crops due to steep costs. “They’re thinking, ‘We’ll just have to take the hit as usual,’ but it’s unlikely they’ll profit this year,” Crehan explains.
His company, AF Group, purchases around 120 million litres of fuel annually, underscoring the widespread dependency on energy prices. With margins eroded by consecutive cost shocks, farmers like Savidge remain hopeful for eventual relief, even as they navigate the current economic uncertainty. “We’ll keep planting and hope the tide turns,” he says.
