Global food production is facing a double blow that threatens to push prices sharply higher in the months ahead. The combination of war in Iran, which has closed the Strait of Hormuz to a large share of the world’s fertiliser trade, and forecasts of a record-breaking El Niño event later this year is expected to hammer harvests from east Asia to the Americas. The Treasury’s reported move to ask UK supermarkets to cap the price of essential foods – greeted with fury from retailers and criticism from figures such as the former head of the Institute for Fiscal Studies and the former chair of M&S – reflects a growing recognition that Britain’s food system is dangerously exposed to global shocks. The food price surge that is building will come on top of a near-40% increase in the cost of food since 2020.
Global food system at breaking point
The Strait of Hormuz carries roughly one-third of the world’s fertiliser trade, and about half of the global population depends on artificial fertiliser to produce its food. With shipping through the strait already down by more than 70% because of the Iran conflict, the shock to global food supplies will play out over the next year regardless of how quickly the waterway may or may not reopen. The chokepoint is far from the only vulnerability. A prescient 2017 study by the foreign policy thinktank Chatham House identified 14 “critical junctures” in the global food system, including the Strait of Malacca, the Black Sea ports linking Ukrainian and Russian farmers to world markets, and the Panama Canal. The canal, which carries 16% of the world’s grain trade, has seen transits severely restricted by a multi-year drought across Central America, forcing up global prices.
Compounding these disruptions is the return of El Niño. Recurring every three to five years, El Niño is a vast movement of warm ocean water northwards that changes weather patterns across the globe. Historically, stronger events have been associated with about a 9% increase in global food prices. The major El Niño of 2015-16 pushed 50 million people into food insecurity across southern and central Africa. Forecasters in Europe and North America are now warning of a potentially record-breaking “Godzilla” event over this year and into next, which could tear up weather patterns and harvests from the Pacific coast to east Asia. The full effects, like those of the fertiliser shock, will be felt over the longer term – into autumn and next year’s harvests.
The long-held assumption that open global markets can always compensate for disruption is being tested as never before. World hunger has been rising since 2014, with the Covid-19 pandemic markedly accelerating the trend. The number of severely food-insecure people has doubled from before the pandemic to 276 million. The system’s growing dependency on a handful of “breadbasket” locations – 60% of global food production occurs in just five countries – makes it vulnerable to simultaneous shocks, precisely what the climate crisis is making more likely.
Britain’s fragile exposure
Britain’s domestic food system is not immune. The UK imports about 60% of its fertiliser and half of its fossil gas, leaving farmers acutely exposed to the global price spikes triggered by the Strait of Hormuz closure. Approximately 30% of global urea supply passes through that chokepoint, and UK farmgate urea nitrogen fertiliser prices have already reached around £650-£700 per tonne. Ammonium nitrate prices have also risen because of their linkage to gas markets. Some farms have seen a 350% increase in fertiliser costs over a year. Fuel and energy costs for transportation, processing and machinery are climbing too, driven by the Middle East conflict; red diesel costs have risen significantly.
The result is what the industry calls a “cost of farming crisis”. Agricultural input inflation, or “agflation”, stood at 8.4% annually in April 2026, far outpacing both general inflation (3.3% CPI) and food inflation (3.5% CPI). While input costs soar, output prices have fallen by 5.8% year-on-year. Milk prices are down about 25%, pig prices down 12%, and beef prices have eased. The Bank of England has flagged agriculture as a sector facing “elevated financial stress”. The average farm household income in 2022 was just £17,800, well below the Minimum Income Standard of £29,500 for a single individual.
Climate change is now delivering a second blow. Three of Britain’s five worst harvests on record have occurred in the last decade. In 2025, record heat and drought led to one of the worst harvests ever, costing British arable farmers an estimated £828 million in lost revenue. Over the whole decade, cumulative losses from extreme weather now amount to £2.3 billion. Oilseed rape yields were down 38% and milling wheat down 20% last year. Extreme weather is affecting the vast majority of farms: 98% of farmers have experienced extreme weather in the past five years, 86% report extreme rainfall and 78% report drought. Four-fifths of farmers say they are concerned about their ability to make a living because of the fast-changing climate, and more than two-thirds are worried about the costs of recovering from extreme weather.
A path to resilience
The UK’s approach has long been that disruptions in one part of the world will be compensated for by access to produce from another. But a market-led system is unlikely to function as expected when supplies run short, forcing up prices or provoking shortages. Profiteering can emerge as large companies with market power generate record earnings. The economists Isabella Weber and Evan Wasner have described how the combination of external shocks and market power can produce widespread inflation, sharpening the cost-of-living crisis and pushing economies into stagnation.
The government recognises the scale of the threat. A still-secret Defra document on the national security risks from “ecosystem collapse” – the summary of which was grudgingly released – warned that “without significant increases in UK food system and supply chain resilience, it is unlikely the UK would be able to maintain food security if ecosystem collapse drives geopolitical competition for food”. It added that countries best placed to adapt are those that invest in ecosystem protection and restoration, and resilient and efficient food systems.
But global price shocks alone will not force the necessary change, as an Oxford University study of previous shocks found. Government action is needed. The UK should rebuild its strategic food reserves, abandoned in the mid-1990s. It needs tighter government control and regulation of essential foods, including well-designed price regulations like those being introduced across the world. Longer-term investment in domestic farming is critical: proposals such as a basic income for farmers, which would provide regular unconditional cash payments to farmers, farmworkers and food producers, could offer financial stability and enable a transition to more sustainable practices. Incentives to build more resilient food production are also essential. The grave danger is that Britain remains bitterly exposed to events over which it has no control in an increasingly unforgiving world.
