The ongoing global energy crisis, exacerbated by the closure of the Strait of Hormuz, is leading to significant increases in food prices. The U.S. Department of Agriculture has projected an average increase of 3.1% for all food prices in March 2026, as supply chain disruptions continue to affect the agricultural sector.
Fertilizer prices have surged dramatically, with some nitrogen fertilizers in the U.S. rising by over 40% in just one month following the onset of the conflict in late February 2026. This spike is largely attributed to a 20% drop in natural gas production, which is a key ingredient in fertilizer manufacturing. Furthermore, the closure has also led to a 70% increase in nitrogen fertilizer prices and blocked 25% of the global phosphate supply due to restrictions imposed by China.
In addition to fertilizer shortages, persistent drought conditions in 2022 forced U.S. producers to cull 13.3% of the national beef cow herd, marking the highest proportion ever recorded. This reduction in livestock is expected to contribute to higher meat prices in the coming months.
Retailers in South Africa are also bracing for food price hikes, driven by record fuel prices that are impacting transport costs. Analysts note that there is typically a lag of one to three months before these higher fuel prices translate into increased food costs for consumers.
Ken Foster from Purdue University warns that the prolonged closure of the Strait of Hormuz could add between 3 to 6 percentage points to food-at-home inflation over the next year. “If we get a few months out, it’s going to be really hard for consumers to substitute away from one food good or group of food products to something else,” he stated.
Low-income households are expected to bear the brunt of these price increases, as they allocate a larger share of their income to food and housing expenses. According to experts, food price hikes hit low-income households harder than high-income households.
The U.N. World Food Program has issued a dire warning, predicting that an additional 45 million people could face food insecurity by the end of 2026 if the current conflict persists. This situation raises concerns about global food security as corn, wheat, and rice supply more than half of the world’s dietary calories.
As the situation evolves, details remain unconfirmed regarding the long-term impacts on food prices and supply chains. Observers will be closely monitoring how these factors play out in the coming months, particularly as planting schedules are affected by the current fertilizer supply challenges.
