Farming News - Prioritise fuel for food and prepare for 2027 shortages, warns CAAV

Prioritise fuel for food and prepare for 2027 shortages, warns CAAV

The UK will soon start to see real impacts of the crisis in the Gulf, and the Government needs to act now to ensure continued access to food. That's according to the Central Association of Agricultural Valuers, which warns that access to fuel may need to be prioritised to avoid crops rotting in fields this summer and enable autumn sowing.

 

 

 

"Reviews of the oil market by sector experts point to a tipping point in supplies in early June, with critically low global levels by the end of May and stocks exhausted by the end of June," says Jeremy Moody, secretary and adviser to the CAAV.

 

"So far, the major impacts have been on South-East Asian manufacturing, but the seismic waves are coming towards us. We all need to be thinking now how to make the best of remaining supplies as fuel and other goods come to be limited by price, shortages or controls."

 

Harvesting, processing and delivery of field vegetables and arable crops is highly fuel dependent, and the UK's complex food supply chains are extremely vulnerable – as seen by the bare supermarket shelves during the Covid pandemic. And it's not just fuel that's affected – it's also access to raw materials for plastics and CO2 for packaging. Restriction of supplies will, in the first instance, push food prices higher, and subsequently, risk halting them altogether.

 

Even if the war were to be ended quickly – which is looking increasingly unlikely – there will be a time lag before normality can resume, says Mr Moody. "Physically blocking 20% and more of world supplies of oil and other commodities for months will inevitably have major consequences. The prospect of a long blockade extends that timetable, with long-term consequences for UK farming and food supply."

 

Domestic production of wheat and barley could be severely curtailed this autumn as arable farmers, following three years of financial losses and facing another two loss-making years, may opt not to plant some or more of their land this autumn. Low commodity prices and extreme weather meant arable producers lost money in 2023, 2024 and 2025, and now soaring input costs have added to the mix when looking ahead to 2027.

 

Red diesel costs have soared from 65ppl, at one point to almost 140ppl, with nitrogen fertiliser up 53% on last year. Harvest 2026 is predicted to lose an average of £56/acre, rising to a loss of £139/acre for harvest 2027. "Across a 500-acre farm that equates to losses of £28,000 and £69,500, respectively," says Mr Moody. "The cumulative losses point to a significant strain on cash flow and credit, limiting farmers' ability to plant even where they are minded to do so."

 

It is possible that the impact of the war constitutes 'exceptional circumstances', warranting official intervention under s.20 of the Agriculture Act 2020, he suggests. "The situation should be under close review by the UK Government's Market Monitoring Group, and appropriate options identified."

 

·                For more information visit www.caav.org.uk.