Research by the Andersons Centre shows agricultural input inflation ("agflation") has climbed sharply since the start of the Iran conflict, reaching an estimated 7.6pc in March 2026 - well above general inflation (3.0pc) and food inflation (3.2pc).

This coincides with falling prices for agricultural outputs, now 6.5pc lower than the same time last year.

"This highlights a clear ‘cost of farming’ squeeze that the sector is now facing," says the Andersons report.

"Agflation is now rising at its fastest rate since early 2022. While levels remain below the peaks seen following the Ukraine invasion [by Russia], continued disruption linked to the Iran conflict, particularly around the Strait of Hormuz through which around 20pc of global oil and gas flows, still presents challenges for input costs.

"In contrast to 2022, when output prices rose alongside costs due to Black Sea supply disruption, current global grain and milk supplies remain ample. As a result, output prices are subdued, intensifying profitability pressure faced by UK farmers."

The agflation rise is especially evident in nitrogen fertiliser costs - particularly as around 30pc of global urea supply is constrained by the Strait of Hormuz, says the report.

But farm input pressures are not limited to fertiliser. Rising energy and fuel prices are feeding through into machinery and contracting costs.

Andersons says a prolonged conflict "would also risk broader inflationary spillovers, raising the prospect of renewed pressure on consumer demand and a wider cost-of-living squeeze".

It adds: "This points to a challenging outlook for UK farming, with margins under pressure from both sides at a time when support is declining in real terms."

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