29th March 2026
The global surge in energy prices is now feeding directly into agriculture, with fertiliser costs rising sharply once again in 2026. For UK farmers, this is not a theoretical concern but an immediate economic pressure, arriving just as the spring planting season begins. The consequences are likely to extend far beyond the farm gate, shaping food prices over the next 12 months.
Fertiliser prices in the UK had stabilised somewhat after the extreme peaks of 2022, but they remained structurally elevated. In 2025, nitrogen fertiliser prices were still around 14% higher than the previous year, despite being below earlier highs. However, recent geopolitical disruption—particularly affecting energy markets and shipping routes—has reversed that stability. Prices are now rising rapidly again.
Recent data illustrates the scale of the shift. Urea, one of the most widely used nitrogen fertilisers, has increased by roughly 30-55% in a matter of months and is about 55% higher than a year ago. In the UK specifically, reports indicate fertiliser prices have risen by around 40% since the latest escalation in conflict, with supply routes under pressure. Wholesale benchmarks show granular urea around £424 per tonne and ammonium nitrate near £400 per tonne earlier in the year, with projections suggesting prices could climb well above £700–£900 per tonne during peak demand periods.
These increases are primarily driven by energy costs. Natural gas accounts for roughly 60–80% of the cost of producing nitrogen fertiliser, meaning that spikes in gas prices feed almost directly into fertiliser markets. With gas prices rising sharply amid geopolitical tensions, fertiliser has followed the same trajectory. At the same time, supply disruptions—particularly through key global shipping routes—have reduced availability and increased volatility.
For UK agriculture, the implications are immediate and significant. Fertiliser represents a major share of farm input costs, and sudden increases force difficult decisions. Farmers may reduce application rates, delay purchases, or switch to less fertiliser-intensive crops. While these adjustments can protect margins in the short term, they often come at the cost of lower yields.
However, fertiliser is only one part of a broader cost squeeze facing farmers. Diesel prices have also risen in line with global oil markets, increasing the cost of running tractors, harvesters, and transport equipment. Modern farming is highly fuel-dependent, and even modest increases in diesel prices can significantly raise operating costs during planting and harvesting seasons. In addition, agricultural chemicals such as pesticides and herbicides have become more expensive due to higher manufacturing and transport costs, as well as supply chain constraints.
Many of these chemicals rely on energy-intensive production processes and globally traded inputs, meaning they are subject to the same upward pressures affecting fertiliser. Taken together, rising fuel and chemical costs compound the financial strain on farmers, further tightening margins and reinforcing the likelihood of reduced production or higher output prices.
This is where the connection to food prices becomes critical. Agricultural production operates with a time lag: decisions made during planting season determine output months later. If fertiliser use declines in spring and summer 2026, the effects will be felt in harvest volumes later in the year and into 2027. Lower yields, combined with already elevated input costs, create upward pressure on food prices.
Early indicators suggest that this process is already underway. Rising fertiliser and fuel costs are increasing the cost of producing staple crops such as wheat, barley, and oilseeds. These crops form the basis of much of the UK food system, either directly or indirectly through animal feed. As feed costs rise, so too do the costs of meat and dairy production, amplifying the inflationary effect across the food chain.
The likely outcome over the next 12 months is a renewed period of food price inflation. Prior to the current disruption, food price increases were expected to remain relatively modest. However, the latest fertiliser and energy shocks have altered that outlook. A reasonable central estimate is that food prices could rise in the range of 5–10%, with higher outcomes possible if supply constraints worsen or weather conditions reduce yields further.
The UK is particularly exposed because of its reliance on imported fertiliser and energy. Import data shows both rising volumes and rising prices for fertiliser inputs, reflecting a broader global trend in which demand remains strong while supply chains are under strain.
Ultimately, the current situation highlights the tight interconnection between energy markets, agricultural inputs, and food prices. Fertiliser sits at the centre of this system. When its price rises sharply, the effects ripple outward—from farm economics to supermarket shelves.
The coming year is therefore likely to be shaped by this chain reaction. While the exact scale of food price increases will depend on factors such as weather and global trade flows, the direction of travel is clear. Higher fertiliser costs are already feeding into production decisions, and those decisions will, in time, be reflected in the price of food.