UN FAO Warns: Global Food Prices May Accelerate Upward by Year-End
Taylor Wilson
FAO chief economist Maximo Torero warns that the Iran war, the Ukraine conflict, and a strong El Niño are converging to push global food prices higher by year-end and into next year — commodity-to-shelf transmission typically takes just three to six months.
Where is the price signal coming from?
Torero told Reuters: commodity prices will start rising faster now; food prices will move by year-end and climb further next year.
Wheat, corn, and rice have edged up, but current levels still reflect relatively good harvests — future supply tightening is not yet priced in.
This means → today's prices are yesterday's news; the real increase is still ahead, and the three-to-six-month lag is the countdown window.
Why are costs rising everywhere at once?
Tensions at the Strait of Hormuz are lifting Brent crude, which in turn raises pumping, packaging, processing, and shipping costs across nearly every link in the farm-to-table chain.
Higher natural-gas prices feed directly into fertilizer costs; Ukraine's strikes on Russian oil-and-gas infrastructure squeeze diesel and gas export supply.
In plain terms = farming needs fuel, fertilizer, and freight — all three are rising at the same time, compressing margins from every direction.
Are farmers already underwater?
American Farm Bureau data: without federal subsidies, U.S. farmers growing nine major crops could lose $32 billion in 2027 — every crop falls below break-even on a per-acre basis.
Australia's winter crop output is forecast to drop 21%, driven by surging fuel and fertilizer costs and uncertain input supply.
Some U.S. growers have already shifted to soybeans, which need less fertilizer; global wheat and corn acreage was cut in the first three months after the Iran war began.
This reflects a deeper shift: farmers are not choosing to plant less — they cannot afford to plant at all. Cost pressure is reshaping planting decisions themselves.
Will El Niño make it worse?
The FAO expects this year's El Niño — a periodic ocean-temperature anomaly that disrupts global rainfall patterns — to be unusually strong, potentially pushing tens of millions into severe food insecurity.
India's monsoon is already delayed; this month's rainfall is forecast below average, posing a direct threat to rice output.
This means → the cost side (fuel, fertilizer, freight) and the supply side (weather, acreage) are deteriorating simultaneously — price pressure is a two-front squeeze.
Who ends up paying?
Whether higher commodity costs fully transmit to consumers by year-end depends on two variables: government policy buffers and how fast farm-input supply recovers.
In plain terms = subsidies can absorb the shock for a while, but if oil and fertilizer prices do not retreat, grocery-shelf price tags will eventually follow.
For ordinary consumers, the question is no longer *whether* prices rise — it is how much, and how soon.
Content is for reference only, not financial advice.