The United Nations Food and Agriculture Organization warns of a looming global food price surge driven by wars in Iran and Ukraine, rising input costs, and a strong El Niño. Chief Economist Maximo Torero projects food prices will rise by late 2026 and accelerate in 2027, with a three-to-six-month transmission delay. High fuel and fertilizer costs are squeezing farmer margins globally, leading to reduced planting and a projected $32 billion loss for U.S. growers in 2027.
Global food price surge
- ▪The United Nations Food and Agriculture Organization warned on August 5, 2026, that the world is on the verge of another bout of food inflation.
- ▪Maximo Torero projected that global food prices will start increasing by the end of 2026 and will increase further in 2027.
- ▪The transmission delay from global commodity price increases to final consumer food prices is approximately three to six months.
War-driven supply disruptions
- ▪Geopolitical instability in the Strait of Hormuz threatens the supply of Brent crude oil and natural gas, impacting global agricultural systems.
- ▪Ongoing wars in Iran and Ukraine are driving up agricultural costs and reducing crop yields globally.
- ▪Ukrainian attacks on Russian oil and gas infrastructure have curtailed the export market for diesel and natural gas.
Rising agricultural input costs
- ▪Rising crude oil prices, loss of fertilizer from the Gulf region, and localized diesel shortages are driving up agricultural production costs.
- ▪Brent crude oil is a critical input for agricultural pumping, packaging, processing, and transportation, while natural gas is essential for fertilizer production.
Reduced crop planting
- ▪Global wheat and corn planting was reduced during the first three months of the war in Iran.
- ▪Some United States agricultural producers have shifted crop planting from wheat and corn to soybeans to reduce fertilizer input requirements.
- ▪Australia projects a 21% decline in winter crop production due to rising fuel and fertilizer prices and input availability uncertainty.
El Niño weather threat
- ▪A delayed monsoon and below-average rainfall in India during August 2026 threaten rice production and global commodity costs.
- ▪A strong El Niño weather phenomenon in 2026 is expected to alter rainfall patterns, potentially pushing tens of millions of people into acute food insecurity.
Farmer margin pressures
- ▪Without federal assistance, United States farmers growing nine principal crops are projected to lose $32 billion in 2027, with every analyzed crop falling below breakeven on a per-acre basis.
- ▪Tight profit margins are causing stress in planting decisions for agricultural producers in Europe, the United States, Brazil, and Asia.
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