Rising Fertiliser and Fuel Costs Push UK Farmers to the Brink

UK Farmers Squeezed by Soaring Input Costs Amid Iran Conflict

British farmers are under mounting financial pressure as the cost of fertiliser and red diesel continues to climb sharply, driven by energy market volatility linked to the ongoing war in Iran and instability across neighbouring Gulf states.

Andrew Williamson, who manages 900 acres of arable farmland near Bridgnorth in Shropshire, is among those voicing serious concern about the long-term impact on agricultural production — and ultimately on food prices for consumers.

Fertiliser Prices Hit Record Highs

Since July 2025, when Williamson secured his fertiliser supply, prices have surged by approximately 50%. What once cost £330 per tonne has now climbed to £490 per tonne — a dramatic increase that is straining farm budgets across the country.

The National Farmers' Union notes that natural gas accounts for between 60% and 80% of the total cost of producing nitrogen fertilisers, making the sector acutely vulnerable to energy price shocks. With oil prices briefly topping $100 per barrel last week, governments worldwide have been forced to release emergency fuel reserves in a bid to stabilise markets.

Williamson's farm has been relatively shielded so far, having purchased the bulk of this season's fertiliser before prices escalated. However, he faces a difficult decision later this year when he would normally stock up for the following season's crops — which include wheat, barley, and oats.

"We're already struggling to break even and cover our cost of production," Williamson said. "These rising input costs make that even more difficult."

Livestock Farmers Hit Hardest

While arable farmers like Williamson can sometimes plan ahead and buy fertiliser in bulk, livestock farmers are far more exposed. They typically purchase fertiliser on an as-needed basis, leaving them with little protection against sudden price spikes.

"Livestock farmers are going to be absolutely hammered by this," Williamson warned.

The timing makes the situation even more painful. The current crisis follows two consecutive poor harvests, leaving many farming operations with already depleted financial reserves and little room to absorb additional costs.

Red Diesel Costs Add Further Strain

Compounding the fertiliser crisis is a sharp rise in red diesel prices — a lower-duty fuel used exclusively by specific industries, including agriculture. Williamson estimates that red diesel costs have risen by roughly 50% compared to pre-conflict levels.

Unlike fertiliser, which can sometimes be bought in advance, fuel must be purchased continuously as operations demand it.

"The difference between fuel and fertilisers is that you have to keep buying fuel as you need it," he explained. "You're always going to be struck by it."

Williamson is now calling for greater transparency throughout the fuel supply chain, arguing that prices "rocket up and then fall like a feather" — a pattern he believes disadvantages both farmers and ordinary consumers at the pump.

A Sector With No Power to Set Its Own Prices

Perhaps most frustrating for farmers is their fundamental inability to pass rising costs on to buyers in the way that other industries might.

"We are price-takers, not price-setters," Williamson said. "We can't automatically pass on our costs — and that is something we've simply got to deal with."

The agricultural sector also operates on long investment cycles, with purchasing decisions and returns often separated by two years or more. This makes every financial misstep potentially costly.

"Every single decision we make carries more risk and more chance of getting it wrong," Williamson added.

Consumer Prices Could Follow

While shoppers may eventually feel the impact on supermarket shelves, Williamson was quick to point out that farm commodity prices represent only a small fraction of retail food costs. The wheat content in a loaf of bread, for example, contributes very little to its final price.

The current difficulties have been particularly deflating given that optimism was beginning to return to the sector.

"Confidence was starting to build a little bit — spring is here, the crops look well — and then you get hit by fuel and fertiliser costs that are completely out of our control," he said.

Government Response

The wider energy pricing debate has also reached Westminster. Energy Secretary Ed Miliband stated last week that the government would "not tolerate" profiteering from the Iran conflict, following accusations of price gouging within the fuel supply sector.

For farmers like Andrew Williamson, however, words of reassurance offer little comfort when the bills are already arriving.