The conflict has effectively closed the Strait of Hormuz, a narrow waterway that normally carries about a fifth of the world’s oil and gas and roughly a third of fertiliser trade. That choke point, hit since fighting escalated in late February, pushes up the price of both fuel and farm inputs at the same time. Oil and urea prices have already climbed about 40% compared with pre-war levels.
For dairy operators running energy-intensive systems, those increases feed straight into higher production costs.
Fertiliser is where the pain bites hardest, because much of the world’s nitrogen-based product comes out of the Middle East and now faces severe bottlenecks. Urea, a staple fertiliser for pasture-based dairy farms, has jumped from about $800 a tonne before the war to a peak near $1470 as supply tightened. Prices have eased slightly to around $1100 a tonne but that is still far above historic norms.
Farmers effectively wear the hit twice, through pricier fertiliser and higher fuel and power bills needed to run milking sheds, irrigation and transport.
Industry analysts say the longer the Hormuz disruption drags on, the more likely it is that rising on-farm costs flow through to supermarket dairy shelves. Processors can absorb some margin pressure for a while, yet sustained spikes in energy and fertiliser usually end up embedded in farmgate milk prices.
Regions heavily reliant on imported fertiliser face the sharpest pressure, with fewer substitutes available. Shoppers could soon feel the impact in everything from fresh milk to cheese and yoghurt as the cost of feeding the world’s elite athlete dairy cows keeps climbing.
