August/2025

The Soaring Costs of Fertilizer and Animal Feed: A Looming Crisis for UK Farmers.

British agriculture is under growing pressure. In recent years, farmers across the United Kingdom have faced unprecedented challenges. Chief among them are the soaring costs of fertilizer and animal feed, which have put severe financial strain on farming communities. Once predictable and manageable, input costs have now spiralled, primarily due to global supply chain disruptions, geopolitical conflicts, and inflationary pressures. The result is a dangerous squeeze on profit margins that threatens the viability of family farms, national food security, and the long-term sustainability of British agriculture.

This article explores how rising fertilizer and animal feed prices are impacting UK farmers, what’s driving these increases, the broader consequences for the supply chain and food production, and the responses from both the government and the private sector. Through this deep dive, we aim to uncover a crisis that is not only economic in nature but also social and environmental.

1. The Fertilizer Price Shock: An Expensive Necessity

Fertilizer is one of the most critical inputs for crop production. However, since 2021, its price has skyrocketed. UK farmers have witnessed price increases ranging from 200% to 300%, depending on the type and source of fertilizer. Several key factors have contributed to this surge:

Global Conflict and Energy Dependency

● The Russia-Ukraine war disrupted global fertilizer supplies, as both countries are major exporters of nitrogen-based fertilizers and the natural gas required to produce them.
● Europe’s dependency on natural gas for ammonia production—crucial in nitrogen fertilizers—meant UK farmers faced even sharper increases.

Supply Chain Disruptions

● Pandemic-era shipping backlogs, rising transport costs, and port congestion compounded the problem.
● Key components for synthetic fertilizers became harder to import, especially urea, DAP (diammonium phosphate), and potash.

Environmental Regulations and Closures

● UK and European policies pushing for cleaner energy led to the closure of some domestic fertilizer plants.
● This has made the UK more dependent on international markets and vulnerable to external shocks.

2. Impact on Crop Yields and Farming Practices

With fertilizer costs reaching unaffordable levels, many farmers have been forced to make difficult decisions:

Reduced Fertilizer Usage

● Some arable farmers have cut back fertilizer application, resulting in lower crop yields.
● Crops like wheat, barley, and oilseed rape, which heavily depend on nitrogen fertilizers, have seen reduced production volumes.

Alternative Approaches

● Farmers are increasingly turning to manure, compost, and cover crops to supplement or replace chemical fertilizers.
● These methods are labour-intensive, require more land, and are not suitable for all soil types.

Economic Consequences

● Reduced yields mean less produce to sell, directly impacting revenues.
● This can also make it harder for farmers to meet contractual obligations with supermarkets or processors.

3. Animal Feed Prices: A Blow to Livestock Farmers

For livestock producers—particularly those in the dairy, poultry, and pig sectors—animal feed represents 60% to 70% of production costs. The surge in feed prices has been equally punishing:

Global Price Volatility

● The prices of key feed ingredients such as wheat, soy, and maize have soared due to droughts, geopolitical instability, and strong demand from countries like China.
● The Russia-Ukraine conflict again played a central role, as Ukraine is a major exporter of grains.

Import Dependency

● The UK imports a significant portion of its animal feed ingredients, making it vulnerable to exchange rate fluctuations and global market trends.

Operational Consequences

● Some farmers have been forced to reduce herd sizes or delay breeding cycles to control feed costs.
● Others have exited livestock farming altogether, particularly smaller family-run operations.

4. The Profit Squeeze: Falling Incomes and Rising Debts

Despite rising production costs, many farmers cannot pass these increases on to retailers or consumers. This mismatch has created a growing profitability crisis.

Market Pressures

● Supermarkets and food processors often resist paying more for produce, citing consumer price sensitivity.
● UK farmers have limited bargaining power, especially those operating on short-term contracts.

Operating at a Loss

● Many farms, especially small and medium-sized enterprises, are operating at or below break-even levels.
● The disparity is especially pronounced in dairy, where some farmers report being paid 30p per litre while production costs exceed 40p.

Rising Debt and Asset Liquidation

● To stay afloat, farmers are taking on high-interest loans, selling off equipment, or even selling land.
● For many, this is unsustainable, leading to farm closures or consolidation under larger agribusinesses.

5. Food Security at Risk: Supply Chain Disruptions

The ripple effects of rising input costs extend well beyond the farm. The broader UK food supply chain is under threat, potentially compromising the nation’s food security.

Lower Domestic Output

● Reduced fertilizer usage and shrinking livestock herds translate to lower domestic production of grains, milk, meat, and eggs.
● This has already resulted in price increases for consumers and occasional shortages.

Increased Imports

● To compensate, the UK has become more reliant on food imports, particularly for cereals and dairy.
● This raises long-term concerns about resilience, especially in light of global instability and climate change.

Egg and Meat Shortages

● The 2022 egg crisis is a clear example, where high feed costs caused supply disruptions and supermarket rationing.
● Similar trends have been observed in poultry and pork sectors.

6. Government and Industry Response: Is It Enough?

Recognising the crisis, both government bodies and industry actors have introduced measures. However, many farmers argue these steps are insufficient or poorly targeted.

Limited Fertilizer Subsidies

● Government support has focused more on energy bill relief than on input costs.
● Proposals for fertilizer subsidies have gained traction but remain modest in scope. Sustainable Farming Incentives
● Schemes like the Sustainable Farming Incentive (SFI) aim to promote environmentally friendly practices.
● While well-intentioned, many farmers claim that bureaucracy and delayed payments reduce effectiveness.

Supermarket Initiatives

● Some retailers, like Tesco, have launched the Sustainable Farming Initiative to ensure fairer pricing.
● Yet these efforts vary widely and are often limited to specific product lines.

Calls for Policy Reform

● Farming unions, including the National Farmers’ Union (NFU), have urged the government to:
○ Improve price transparency in the supply chain.
○ Provide direct support for input costs.
○ Encourage local feed and fertilizer production.

7. Real-World Stories: The Human Cost

Behind every statistic lies a story of hardship, resilience, and uncertainty.

Small Dairy Farm in Devon

James, a third-generation dairy farmer in Devon, saw his feed bills rise by £20,000 in 2023 alone. Despite increasing yields and working 14-hour days, he is still losing money each month. “We’re producing milk at a loss,” he says. “If prices don’t change, we’ll be forced to shut down.”

Arable Farmer in Lincolnshire

Sophie, who grows wheat and barley, cut her fertilizer use by 30% in 2022 due to rising prices. Her yields dropped significantly, making it difficult to cover loan repayments. “It feels like we’re being punished for something we can’t control,” she explains.

Poultry Producer in Wales

Mohammed, who runs a poultry farm in North Wales, had to cull hundreds of birds because he couldn’t afford to feed them. “Feed used to cost me £250 a ton—it’s now £400,” he says. “Retailers don’t care. They want cheap chicken, no matter what.”

8. Environmental Considerations: A Mixed Bag

Interestingly, the crisis has sparked a shift in agricultural practices, some of which could benefit the environment:

Positive Outcomes

● Reduced fertilizer use may result in lower nitrate runoff and less water pollution.
● Organic and regenerative farming practices are seeing increased interest.

Negative Consequences

● If lower input leads to reduced output, farmers may plough more land, potentially increasing deforestation and soil erosion.
● Financial stress may cause farmers to delay green investments, like solar panels or biodiversity corridors.

9. The Bigger Picture: A Fragile Agricultural System

The current crisis exposes the fragility of the UK’s agricultural system. Over-reliance on imported inputs, lack of price control mechanisms, and volatile global markets mean farmers are often left vulnerable.

Key Challenges

● Globalised input markets
● Climate change and extreme weather
● Energy dependency and production costs
● Labour shortages post-Brexit

Long-Term Risks

● Loss of farming knowledge and culture as family farms shut down
● Increased monopolisation of agriculture by large corporations
● Reduced food diversity and increased vulnerability to global shocks

10. Solutions and the Way Forward

To avoid long-term collapse, the UK needs a multi-faceted strategy to address this crisis.

Short-Term Measures

● Input subsidies or tax reliefs for fertilizer and feed.
● Improved supply chain transparency and price regulation for farm products.
● Financial support schemes that are easy to access and fairly distributed.

Medium-Term Solutions

● Support for domestic fertilizer production and local feed crops.
● Investment in research and development for alternative, sustainable inputs.
● Expansion of farmers’ cooperatives to increase bargaining power.

Long-Term Vision

● A national strategy for food security that balances productivity with environmental sustainability.
● Encourage young people to enter farming with incentives and training.
● Diversification of agriculture to include agroforestry, vertical farming, and climate-smart techniques.

The soaring costs of fertilizer and animal feed are more than just an economic inconvenience—they are a serious threat to the future of UK agriculture. Left unaddressed, they could trigger a cascade of farm closures, food shortages, and long-term dependency on imports. Yet with smart policies, fairer pricing systems, and a renewed commitment to supporting farmers, the UK can weather this storm.

British farmers are the backbone of the country’s food supply. Now more than ever, they need support—not only to survive the present crisis but to thrive in a more sustainable and secure agricultural future.