Farmers and producers will have no doubt felt the impacts of the ongoing conflict between the US, Israel and Iran since war began in February. <\/p>\n
Crude prices have been volatile, having a knock-on effect across fertiliser prices and commodities such as grain and oilseed. <\/p>\n
Recent price patterns<\/p>\n
Prices for the grain and oilseed saw a slight drop at the start of the month, driven by the agreement of a ceasefire between the US and Iran. Last week, nerves crept back in again and prices started to tick up, before easing back down again after the ceasefire between Israel and Lebanon.<\/p>\n
Friday 17 April saw Iran declare the Strait of Hormuz reopened<\/a> and this prompted a quick downturn in crude oil prices with knock-on impacts for grain and oilseed prices.<\/p>\n The relief didn\u2019t last long, with global oil prices jumping back up after the announcement that the Strait would once again be closed. <\/p>\n This recent rise and fall of prices is a pattern we\u2019ve witnessed since the start of the Iran war, easing when we have \u2018certainty\u2019 and climbing back up as tensions start to worsen.<\/p>\n Globally, Brent crude oil (which is the most reflective of the costs for the UK) is around US$20 higher compared to when the war started. <\/p>\n In the UK, for bread wheat, we\u2019re seeing prices around \u00a310 per tonne higher, for rapeseed it\u2019s about \u00a320 higher (over the same period). More details can be seen in the tables below.<\/p>\n \u201cOilseed and vegetable oil prices have been dictated by the spikes in crude oil and natural gas prices. That feeds into fuel, fertiliser costs and general farm income costs, making these crops more expensive to grow,\u201d explained Helen Plant, the Agriculture and Horticulture Development Board\u2019s (AHDB) lead analyst for cereals and oilseeds.<\/p>\n Changing planting intentions<\/p>\n In response to higher input costs, we could see changes in what farmers grow around the world as they worry over potential lost profits.<\/p>\n \u201cIn parts of Western Australia, there has been suggestion that farmers may grow less wheat, more oats and barley, and more rapeseed,\u201d Plant said.<\/p>\n \u201cIn the US, planting is underway but it\u2019s still in its early stages. So there\u2019s concern that farmers may change some of their planting intentions and plant less grains, more oil seeds, or perhaps a little less overall, depending on how they feel towards some of the prices and some of the cost information they\u2019re getting.<\/p>\n \u201cIt\u2019s quite a tricky picture to judge because a lot of farmers will have committed and bought inputs a couple of months ago or committed to sell certain products further down the line.\u201d<\/p>\n There isn\u2019t much data yet on how much some of this may change and that worry can be felt across the market. If we see smaller crop yields, price lifts will follow.<\/p>\n We do have some big stocks for grains \u2013 at least at the moment \u2013 after the 2025-26 harvest, which has somewhat reassured the market and helped to temper grain prices. However, weather is a big focus right now and the market will be getting nervous on how yields will fare. <\/p>\n If prices do spike and trickle down to consumers, we could see more mindful shoppers, particularly in developing or lower-income economies where food price inflation has a more immediate impact on household budgets. This may translate into reduced demand for higher-priced, discretionary food products such as meat or alcohol \u2013 a trend observed in parts of the world following the start of the Russia\u2013Ukraine war in 2022. <\/p>\n While this shift would not likely directly reduce grain consumption for human food, it could impact demand for feed grains through lower livestock production or imports in those regions.<\/p>\n At the same time, with the Middle East one of the world\u2019s biggest importers for grains, the sector will be worried that there could be surplus of product \u2013 a costly consequence.<\/p>\n More demand for biofuels<\/p>\n As fuel prices going up, we could also see more demand for biofuels and therefore vegetable oils. Although it\u2019s worth noting that the UK has much more restrictive levels on such inclusions due to its infrastructure and equipment, so this may not offer as much relief as it does for other areas with higher thresholds. <\/p>\n Cautious fertiliser use<\/p>\n In terms of the price of wheat, Plant said increases are fairly minimal compared to some other items. Where those dealing with this commodity will feel the impact is in the production costs \u2013 i.e. the energy needed to mill. Energy is arguably the biggest impact across the board, with everyone affected. <\/p>\n Furthermore, with fertiliser being more expensive, we could see farmers being more reserved with how much nitrogen they use. In turn, this could result in lower quality wheat come harvest \u2013 with protein levels dampened. <\/p>\n Contracts will obviously dictate whether this is a feasible resolve. If you have signed one that specifies certain levels, you are obliged to follow through or take the financial penalty that comes with breaking it.<\/p>\n \u201cMost contracts have a level of tolerance within them so you can supply slightly lower and take a small penalty,\u201d added Plant.<\/p>\n She continued: \u201cBeyond that, if you haven\u2019t already signed the contract, you might be less willing to sign it now and to just sell it at harvest when you know what you\u2019ve got.\u201d<\/p>\n From a flour miller\u2019s point of view, there\u2019s a few ways to somewhat circumvent the impacts of higher fertiliser prices, as Plant explained: \u201cThey can either import wheat from somewhere that hopefully has got enough protein this year to mix in and bring ours up \u2013 which does bring a cost in because you\u2019ve got the added transportation.\u201d<\/p>\n But\u2026if we have lower protein, chances are that we\u2019re not alone. <\/p>\n \u201cSometimes there is the option to add extra protein as a gluten formulation, but that\u2019s down to availability and price,\u201d Plant continued. <\/p>\n \u201cSo they have options, but they\u2019re not straightforward ones.\u201d<\/p>\n How does this compare to Ukraine conflict?<\/p>\n The good news is that we\u2019re not in as bad a place as we were compared to 2022 \u2013 when the Russia-Ukraine war started. As illustrated by the tables below, oilseeds, wheat and Brent crude oil were all much higher that year. The market subsequently eased in 2024 before picking back up – but not as ferociously – in 2026 following the joint US-Israel attack.<\/p>\n With the situation changing by the day, it\u2019s tricky to pin down exactly what will happen in the market and if prices will start to ease for a meaningful amount of time. At the same time, weather will play a crucial role in shaping the market. <\/p>\n Wheat, oilseed and crude oil futures<\/p>\n Below are prices for the end of February (just before active conflict started in Iran) and a couple of other comparisons. The prices for early-Mid April 2022 show the prices during the early stages of the conflict in Ukraine. <\/p>\n Bread wheat prices, delivered to the North West of England<\/p>\n These are prices from a survey by AHDB<\/a>, which is run on a Friday and shows prices at the end of trading on a Thursday (except where the Friday is a bank holiday).<\/p>\n DateThu 13 April 2022Thu 18 April 2024Wed 16 April 202526 February 2026Thu 16 April 2025Delivery monthMay-22May-24May-25May-26May-26Price per tonne\u00a3379.00\u00a3259.50\/t*\u00a3195.50\u00a3207.50<\/p>\n * No direct comparable price for this time last year.<\/p>\n Rapeseed prices, delivered to Erith<\/p>\n