Australia’s food system is under significant strain as global conflicts begin to impact agricultural production, with farmers already reducing planting and warning of rising supermarket prices. At the heart of this issue lies a supply chain that most consumers rarely consider—until now. Fertiliser and diesel, both crucial for modern farming, are transported through shipping lanes in the Strait of Hormuz.
When movement through this vital corridor slows, costs increase, and availability becomes limited, forcing farmers to make tough decisions about whether they can afford to plant at all. Chef, farmer, and author Matthew Evans has highlighted how the current crisis has exposed the fragility of Australia’s food system. “What’s happening right now is a wake-up call,” he said. “Our entire food system relies on imported fertiliser and diesel. When that gets disrupted, everything becomes more expensive, and that flows straight through to supermarket prices.”
Recent data from AUSVEG indicates that over a quarter of vegetable growers have already reduced or stopped planting. The effects of this will not be limited to farms alone. Tighter supply later in the year is expected to lead to higher prices for everyday staples like bread, pasta, and beer—not just fresh produce. Toowoomba grazier and founder of DIT AgTech, Mark Peart, explained that farmers are adjusting their operations to stay afloat. “Some are cutting back on fertiliser use, some are reducing stock numbers, and others are delaying or rethinking parts of their operation because the cost of diesel and inputs has become so unpredictable,” he said.
Peart noted that uncertainty is driving these decisions, with many farmers unsure about future costs or the timely arrival of supplies. “We’re also seeing a move towards efficiency—farmers are looking at ways to use less diesel, reduce labour, and get more out of what they’re already doing,” he added. However, cutting costs can only do so much in a system built on imported fertiliser and fuel.
Chandana Maitra, a senior economics lecturer at the University of Sydney, pointed out that the problem stems from the core of how Australian farms operate. Urea, a nitrogen-rich compound used in fertilisers, and diesel are both sourced from overseas. When shipping routes face disruptions, securing fertiliser becomes more difficult. At the same time, higher fuel costs affect every stage of farming, reducing output and increasing prices.
Australia relies heavily on imported fertiliser, much of which travels through key shipping routes such as the Strait of Hormuz, a critical global chokepoint. This situation can lead to broader price pressures across the economy. If sustained, it may delay interest rate cuts or keep inflation elevated for longer. Additionally, the Middle East is an important market for some Australian agricultural exports. Ongoing instability could negatively impact export earnings while disruptions to fuel and fertiliser markets continue to drive up domestic costs.
Evans believes the focus should now be on how the nation responds to these challenges. “This might be the moment that finally forces us to rethink how we grow food,” he said. “Because it doesn’t have to be this way.” China’s shift toward electrified transport and logistics shows how quickly systems can change across industries. With less diesel in the mix, its urban transport and delivery networks are less vulnerable when oil prices spike.
For Australian farmers, attention is now turning to the winter planting window—a critical period that will determine supply later in the year. Many are already scaling back after successive shocks, including the impacts of the COVID-19 pandemic and the war in Ukraine, both of which drove up fertiliser prices. “At some point, you have to ask, how many times do we need to learn the same lesson?” Evans said.
Evans sees an opportunity at the farm gate. Healthier soils, using less fertiliser, and a wider mix of crops can ease the burden on farmers in the long term. “It’s small, practical changes that reduce costs, improve soil, and make farms less dependent on expensive inputs,” he said. Australia still produces enough food to feed three times its population and exports most of what it grows—a strong position, though one Evans says won’t hold without adapting to volatile markets.
“We have the land, the knowledge, and the people. What we need now is to apply that knowledge in a way that makes us less exposed to global shocks.”
