Should the European food industry accelerate the shift towards using more sustainable and environmentally friendly pesticides? The European Commission aims to answer this question with an action plan on Tuesday. European farmers' organizations have already announced they will demonstrate against the lack of compensation for damages.
Currently, global (agricultural) food production is struggling with the effects of the blockade of the Gulf of Hormuz. Because fertilizer is made by burning large amounts of (cheap) natural gas to produce urea and ammonia, farmers worldwide face ever-increasing fertilizer costs.
Geopolitics
At present, European countries primarily depend on Russia and Morocco. In other parts of the world, the consequences of the Persian Gulf blockade are even greater. With rising energy prices, fertilizer is becoming a huge expense for farmers as well.
Promotion
This also highlights how geopolitics impacts society, bringing together several dilemmas about financial flows to Russia, a business model dependent on large amounts of fertilizer, and our use of fossil fuels.
Worldwide
The effects of rapidly rising fertilizer prices are now visible worldwide. Farmers in Europe, South America, and Asia try to limit their costs by using less fertilizer, switching to other crops, or postponing investments. Some farmers even consider leaving fields fallow because the expected yields no longer outweigh production costs.
The current crisis began after the escalation of the conflict between the United States and Iran. Due to tensions around the Strait of Hormuz, a crucial route for exporting raw materials for fertilizer, international trade flows have been severely disrupted. Since late February, prices for urea, an important nitrogen fertilizer, have risen by more than half according to the European Commission.
More Than Doubled
In countries such as Argentina, prices have doubled in a short time. European farmers’ organizations are also sounding the alarm. In Latvia, farmers warn that farmland may remain unused because the costs of fertilization, fuel, and energy have become too high. Analysts say the situation is more serious than previous shocks during the COVID-19 pandemic or the outbreak of the Russian war in Ukraine.
No Crisis
Nevertheless, experts do not immediately expect a global food crisis in 2026. Many farmers have already purchased fertilizer stocks for the coming season ahead of time. However, pressure on agricultural businesses continues to increase, especially in Europe where farmers also face high energy bills, stricter environmental regulations, and mounting debts.
More Environmentally Friendly
The crisis is simultaneously leading to changes in agriculture. More and more farmers are seeking ways to use fertilizer more efficiently. This involves more precise fertilization, different crop rotations, and cultivation of crops that require fewer nutrients, such as soy, barley, or oats. Interest is also growing in technologies that can reduce fertilizer use.
EU Subsidy
Experts say the fertilizer market is changing structurally. Where companies previously relied on fast global deliveries, focus is now shifting to supply security and domestic production capacity. European countries thus aim to become less dependent on imports from politically unstable regions. There are even calls for EU subsidies to maintain (and expand!) European production.
The Food and Agriculture Organization of the United Nations, the FAO, previously warned that global fertilizer prices could rise another 15 to 20 percent in the first half of 2026 if the crisis continues. This may affect the production of staple crops such as wheat, corn, and rice.
Analysts emphasize that the consequences could ultimately extend beyond the agricultural sector alone. Higher costs for farmers can translate into food price increases for consumers. This raises concerns that geopolitical conflicts are having increasingly direct effects on daily food supplies.