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Impact of Energy Costs on Food Sectors
Comparison of price inflation sensitivity across food categories
Primary Sources
How the Iran war is driving up food prices through fertilizer supply ...
A prolonged war is beginning to feed into food prices, as higher energy and fertilizer costs ripple through the food system. Fertilizers are at risk, as their supplies are choked at the Strait of Hormuz, a critical shipping corridor for a third of the world’s fertilizer shipments. More than a quarter of global nitrogen fertilizer trade and about 20% of the world’s oil and liquefied natural gas (LNG) passes through the strait. Since the start of the conflict, shipping activity across the strait has dropped sharply, disrupting trade flows. Natural gas is both a feedstock and the primary source for producing ammonia, the building block of nitrogen fertilizers. Major exporters such as Qatar dominates LNG production in the Gulf region and is the world’s third-largest exporter of natural gas after the U.S. and Australia. But transit disruptions and higher shipping risk are tightening availability, raising the input costs for fertilizer buyers. The Qatar Fertilizer Company (QAFCO), the world’s largest single-site for urea exports and supplier of 14% of the world’s urea, has remained offline for almost a month since Qatar closed its gas plants following the Iran strikes. The disruption underscores how quickly supply shocks in the Gulf can ripple through global fertilizer markets. U.S. dependence on fertilizer imports The U.S is a net importer of fertilizers and so the global trade dynamics are already feeding into the domestic food prices. The country relies heavily on fertilizer imports, especially for potash, with net imports accounting for more than 90% of total use, according to the U.S. Geological Survey. While the U.S. is a major fertilizer producer, it still imports more fertilizer than it exports from Canada, Russia and Qatar. Because fertilizers are globally traded, supply chain disruptions quickly pass through to American farmers in the form of higher input costs. Global supply chain constraints are tightening But the risks extend far beyond U.S. agriculture as the war enters its second month. Gulf Cooperation Council members including Saudi Arabia, Qatar and Oman, supply roughly a quarter of global urea exports. And with increased geopolitical risks, trade to countries that are heavily dependent on imports including India, countries in Africa are particularly exposed. The problem is exacerbated by the fact that production in India and Bangladesh has been hit by plant shutdowns and maintenance amid limited LNG supplies. Disruptions in fertilizer flows...
Grocery, Produce Prices Are Rising As Oil Soars During War With Iran ...
Your produce bill is about to get pricey as the Iran war jacks up US food costs By Alex Bitter You're currently following this author! Want to unfollow? Unsubscribe via the link in your email. Prices for citrus, berries, and other produce rose in March as oil prices pushed up transportation and refrigeration costs. Smith Collection/Gado/Getty Images 2026-04-04T09:31:01.229Z Grocery prices are rising due to higher fuel and transportation costs. Produce, from berries to limes, provides a stark example, USDA data shows. Fruits and vegetables that are transported long distances and kept cold are particularly vulnerable. Your local grocery store's produce section is the latest casualty in the war with Iran. Wholesale prices for a range of fruits and vegetables, including blueberries, limes, and tomatoes, rose sharply over the past month, according to data from the US Department of Agriculture.Higher oil prices since the US and Israel started the war in February are largely to blame, people who have studied or worked in the produce industry said."Fresh food and perishables are almost like the canary in the coal mine," when energy prices go up, Vidya Mani, an associate professor at the University of Virginia's Darden School of Business, told Business Insider.Oil and transit costs are affecting a wide range of groceries. The United Nations said on Friday that its food price index rose for the second straight month in March after several months of declines. "Energy-related pressures" pushed up prices across a range of goods, with sugar and vegetable oil notching the largest increases, according to a summary of the changes published on Friday. Fresh produce, meanwhile, is one of the most energy-intensive categories of products in most grocery stores, said David Ortega, a professor and the Noel W. Stuckman chair in food economics and policy at Michigan State University."The biggest, most direct impact on grocery prices is going to be through the price of fuel," Ortega said.Rising oil prices mean higher diesel prices, the fuel that powers many trucks that haul fruit and vegetables between farms, distribution and processing centers, and stores. Perishable items that need to be kept cold, from berries to milk, are being hit harder, since diesel often powers refrigeration systems on trailers, Ortega said."Think specialty produce that may have to make it from, say, California, all the way to the East Coast," he said.Wholesale fruit prices in Baltimore, one such E...
US farmers shift from corn as Iran war spikes fertilizer prices
U.S. farmers plan to plant less corn and more soybeans in 2026 than last year, the U.S. Department of Agriculture said, as the Iran war drives up fertilizer and fuel prices in the latest blow to ...
The Hormuz Triple Threat: Why the Iran Conflict Is Inflating the ...
The Hormuz Triple Threat: Why the Iran Conflict Is Inflating the American Produce Aisle Agriculture expert Will Westmoreland explains how the Iran conflict has triggered surging prices for fuel ...
