When fruit grower Ali Capper woke to news that war had broken out in Iran, she says she "felt quite sick" anticipating the repurcussions for the UK farming industry. Farmers and growers in peak planting season are grappling with spiralling costs as the conflict pushes up the price of fuel and fertiliser. News of a two-week ceasefire aimed at resolving the conflict comes too late for this growing season, says Ali, who represents British apple and pear growers.
"Sadly, even if it all ends tomorrow, the costs are baked in now." New figures suggest inflation – the rate at which prices rise – for farm running costs is more than 7% higher this March, compared with last March. The data from independent consultants The Andersons Centre is the first estimate of the overall impact on the agricultural sector since the conflict began suggests The Andersons Centre, which provides analysis and research for organisations across the farming sector and has also done a study for the Department for Environment Food and Rural Affairs, is warning of another "cost of farming squeeze". Farmers have told the National Farmers Union they can't absorb the extra costs and food prices will likely have to rise as a result.
On her farm in Suckley, Worcestershire, Ali says her fertiliser costs have gone up by 40%, red diesel she uses for her tractors has gone up 100% and transport costs are up by about 20%. A third of the world's fertiliser usually passes through the Strait of Hormuz, which has been effectively blocked during the conflict and consequently prices have shot up in recent weeks. Red diesel, a fuel used by farmers in off-road vehicles, machinery and heating has seen its price pushed up by the soaring cost of brent crude – the global benchmark for oil prices.
This all feeds into the cost of food production. Even if the conflict ends within the next two weeks, the Food and Drink Federation expects UK food inflation to reach at least 9% before the end of the year. Ali is also anticipating rises in the cost of plant protection products and packaging.
"We will have to pass this on," she says, adding it was up to the supermarkets she sells to how much they put prices up to customers. She says the apple and pear sector was already hit by a 30% increase in the cost of production across 2022 and 2023, after Russia's full scale invasion of Ukraine. "It was really brutal and, I have to say, when I woke up to the news that it had started again, in Iran, I did feel quite sick," she says.
She recalls how many farmers went out of business, or became loss-making, during the Ukraine-Russia conflict. "We can't go there again. There's no flex in the system." Potato farmer Ben Savidge says if the price of red diesel stays high planting will cost around £5 more per tonne that before the Iran conflict.
"[Red diesel] was 65-70p a litre back in December," he says. But his last two loads cost him between 96 and £1.05p a litre. For now he's having to absorb the extra cost for planting his potatoes on his farm in Ross-on-Wye, Herefordshire, which will end up as chips, as he agreed a contract with his customers at the start of this year.
But he hopes that the good relationship he has with them will allow him to negotiate better prices as his margins have been so eroded. "Last year we had an awfully dry summer which impacted yields drastically so now with our energy prices being hit like they have, it just feels like one thing after another." But he says he will continue to plant and "just hope that it falls our way at the end". Patrick Crehan buys fuel on behalf of a 3,500 member consortium, who are mainly agricultural farmers.
Before the conflict, he was paying around 70p a litre. Just before the ceasefire, he was paying around 130p a litre, though that has fallen back a little since Wednesday. He says he's heard from farmers who no longer think they'll make any money from their crop.
"We have had some examples where they would rather not plant the crop and save the money, because they know it's going to be so expensive to put the crop in and manage it over the course of this year," he says. Patrick points out that though the majority of farmers are still planting their crops "thinking, well we're just going to have to suck it up as we always do", he forecasts that "it's highly unlikely they're going to see a return", as the cost of fertiliser, energy and fuel have seen such significant increases. His firm, AF Group, buys around 120 million litres of fuel a year, from various fuel distributors dotted across the UK, in one of the biggest operations of its kind in the UK.
Though he says there is no shortage of available fuel, Patrick "has no happy words at the moment" to describe the current situation for the farming industry. "I would describe it as busy, and difficult, and testing… the level of increases that we're witnessing, we just haven't seen them before," he told the BBC.
