The ongoing uncertainty in the Middle East is casting a long shadow over Welsh agriculture, adding yet another layer of pressure to an industry already stretched by successive global shocks. From the aftermath of the pandemic to the repercussions of the Ukraine war, farmers have had little opportunity to regain stability before facing fresh disruption linked to the tensions in the Gulf.

The immediate impact is being felt across society and throughout the supply chain. Rising costs are no longer confined to the farm gate, but are evident in production, transport, processing and manufacturing. For farmers, however, the consequences are particularly acute. Fertiliser prices have risen sharply, with urea now exceeding £630 per tonne and imported ammonium nitrate reaching around £530 per tonne - an increase of around 30% compared to pre-conflict levels.

At the same time, supply chains are becoming increasingly strained. Lead times of six to eight weeks are now commonplace, assuming products are available at all. This lack of certainty severely hampers forward planning in a sector where timing is critical and delays can carry lasting consequences.

Fuel costs are adding further pressure. Red diesel prices have climbed to between 120 and 140 pence per litre, effectively doubling compared to pre-conflict levels.

For consumers, the knock-on effect is likely to be higher food prices. With household budgets already under pressure, there is a growing risk that shoppers will turn to cheaper imported goods. This presents a serious challenge for domestic producers and risks undermining the resilience of our local food systems.

Looking ahead to the 2026/27 season, farmers are being asked to make critical business decisions without clear signals on how long current geopolitical tensions may persist. This uncertainty is compounded by the need for clarity on Carbon Border Adjustment Mechanism (CBAM) rates for fertiliser ahead of its introduction in 2027.

Despite relying almost entirely on imported fertiliser products or raw ingredients for domestic fertiliser production, the UK’s position as a relatively small, demand-led fertiliser market within a competitive global industry only intensifies these challenges. Being at the end of the supply chain limits our ability to secure products at competitive prices or at the right time. Should demand weaken further this year, there is a real risk that European production could scale back, making future access even more difficult.

In this context, timely government intervention and coordinated industry support will be essential to safeguard the future of Welsh farming and the wider rural economy.