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Could the Strait of Hormuz supply shock boost regenerative farming?

The Iran war has exposed the frailties of a fossil fuel-dependent food system. Could regenerative agriculture benefit from soaring fertiliser prices?

The frailties of the food system have once again been exposed following the war on Iran by the US and Israel. Fertiliser prices have jumped as supplies fall to a trickle and there is little doubt there will be a knock-on financial impact for food ingredients – and availability.

As reported recently by Ingredients Network, fertilisers are entwined with the global food system, which has left many businesses exposed to higher prices and, likely, constrained supplies. Those that have not done so already are being urged to map their exposure to their chemical inputs.

This year’s conflict in the Middle East has provided another shock to the food system, but some believe it is also another shot in the arm for transitioning food production to systems that rely far less on chemical fuel inputs.

“[...] we need to take these warning signs seriously,” explained Jim Mellon, investor and chief executive of Agronomics, a VC firm focused on supporting solutions to strengthen the global food system. The choice in 2026 is “clear”, he said in an email to Ingredients Network: “Treat food shocks as a new normal, or use them as the catalyst to build a cleaner, smarter future for our food."

Some experts believe that the conflict in Iran offers more than food for thought for food and ingredients companies. Mapping exposure to supply risks born of conflict, geopolitics, and climate is a decent start. However, unhooking the chains from chemical inputs in the medium and long-term is the bolder step.

Shock for the system; shot in the arm for agroecology?

Fertiliser and feed prices rises following Russia’s invasion of Ukraine helped swell interest in regenerative approaches to farming. Companies including Nestlé, Cargill, and PepsiCo set out targets to convert millions of hectares of land to so-called “regen ag”, which should see their suppliers rely far less on chemical inputs.

Raj Patel, food system expert at the Lyndon B. Johnson School of Public Affairs, University of Texas, US, this month posted a fertiliser import vulnerability map on his website, showing the chokepoints and seasonal vulnerability of different countries to import shocks. What the map does not show, he noted, is that “agroecological food systems are resilient to exactly these kinds of geopolitical shocks”.

Indeed, the Fuel to fork report published by IPES Food in May last year showed how food systems are “hooked” on fossil fuels, which run through fertilisers and pesticides as well as ultra-processed foods, long-haul cold chains and plastic packaging. Food systems now consume 40% of all petrochemicals and 15% of fossil fuels globally, the report highlighted.

PepsiCo has talked of “meaningful reductions” in fertiliser use among farms in its regen ag programme.

Nestlé UK & Ireland and Cargill are running a programme to assess whether cocoa shells from a confectionery site in York could be used to create a low carbon fertiliser. If successful, up to 7,000 tonnes of low carbon fertiliser could be produced in York and offered to farmers in Nestlé UK and Ireland’s supply chain.

More and more companies are realising that investing in soil means lowering dependence on synthetic fertilisers and stabilising yields in the long term. According to a Joint Research Centre study in 2024, regenerative wheat systems can reduce fertiliser costs by 18% while maintaining — or even slightly increasing — yields by around 5% over time. In addition, regenerated soils store carbon and enhance functional biodiversity – key factors in emerging environmental credit markets and corporate ESG accounting frameworks, noted the Ecowheataly project, taking place in Italy.

Governments are ‘propping up’ fossil fuel-intensive farming

So far, however, the movement to regenerative approaches remains piecemeal rather than mainstream. Reliance on inputs, like fertiliser, pesticides, and fossil fuels, remains heavy. Governments are also trying to work out how to support this transition when results and data of its benefits remain thin on the ground.

As such, governments continue to “prop up” the current fragile, fossil fuel reliant model, wrote Greenpeace Aotearoa (New Zealand) campaigner Amanda Larsson in an article about the war on Iran’s impact on food prices.

“Right now, billions in public subsidies keep the industrial meat and chemical fertiliser pipeline flowing – and that money must be redirected,” she said.

Other solutions to reduce reliance on chemical inputs like fertilisers and pesticides include green ammonia, nature-based nutrients like biofertilisers and regenerative practices, and “smarter use”, noted Christine Gould, founder of Giga futures, which works with agri-food companies of all sizes on future solutions.

“Each of these can be produced locally or regionally, strengthening food sovereignty, expanding farmer choice, and reducing exposure to vulnerable global trade routes. We just need to direct capital, policies, and value chain support towards them,” she added.