According to a leading British property and farming firm, the ongoing conflict in Iran has led to significant fertilizer shortages, resulting in a price increase of up to 70% for UK farmers. This situation is expected to have a substantial impact on global food prices in the coming year.
Mark Preston, executive trustee of the historic Grosvenor Group, which is overseen by the Duke of Westminster, noted that fertilizer prices were already elevated before the crisis, but have surged by 50% to 70% since the onset of the war in late February.
The conflict has effectively disrupted operations in the Strait of Hormuz, a critical passage for global fertilizer supply, which is essential for food crop cultivation. Although Preston indicated that UK farmers might not feel the immediate effects this year—since most fertilizers have already been applied—the repercussions are likely to manifest in the following year. He expressed concern that farmers are currently hesitant to purchase fertilizer, hoping for an improvement that may not materialize.
The Grosvenor Group operates a prominent dairy and arable farm in Cheshire, England, and also owns rural estates in Lancashire and Scotland, along with significant holdings in central London’s Mayfair and Belgravia areas. The company produces millions of liters of milk at its Eaton estate in Cheshire, which has historical ties to the Duke of Westminster dating back to the 1400s, supplying major retailers like Tesco and Müller.
Preston emphasized the potential for a “very dramatic problem” affecting food availability not just in the UK, but globally, due to the reliance on fertilizer transported through the Strait of Hormuz. He mentioned that farmers might adapt by increasing their spring crop planting next year instead of winter crops, providing them some flexibility.
The extent of future food price increases will largely depend on the reopening of the Strait of Hormuz, where around 1,600 vessels are currently stranded. Preston pointed out that while oil availability has alternative sources, the same cannot be said for nitrogen, a key component in fertilizer production, making the situation critical.
The closure has also disrupted the supply of liquefied natural gas, an essential ingredient for nitrogen-based fertilizers like urea. Notably, Grosvenor’s reliance on fertilizer is minimal, as the company utilizes cow dung whenever feasible.
Preston’s comments followed a warning from the CEO of Yara International, the largest fertilizer producer globally, about potential food shortages and price hikes impacting some of Africa’s most vulnerable communities due to the ongoing conflict in the Middle East.
A recent Opinium survey revealed that 80% of UK residents are concerned about rising grocery prices, as retailers are passing on increased costs to consumers.
Grosvenor reported an 18% drop in underlying profits to £70.5 million last year, partly due to challenges in its North American operations. However, its UK property sector remained strong, boasting a 97% occupancy rate. The company is currently working on its largest project to date, which includes the redevelopment of South Molton Street in central London featuring offices, retail spaces, a hotel, and 33 residential units, scheduled for completion next year.
Led by Duke Hugh Grosvenor, one of the wealthiest individuals in the UK with an estimated net worth of £9.56 billion, Grosvenor aims to construct 700 social housing units in the northwest of England. To date, 69 units have been completed near Chester and Ellesmere Port, with plans for an additional 120 this year.
The group distributed dividends totaling £53.7 million to the duke’s family and associated trusts, an increase from £52.4 million in 2024. Additionally, Grosvenor paid £248 million in taxes, compared to £107.4 million in the previous year, with £200 million of that amount attributed to the UK, largely due to increased personal and corporate tax obligations from property sales.
Grosvenor has been expanding its investments in flexible office spaces and recently commenced its first directly managed flexible workspace outside of London, located in Manchester’s Northern Quarter. James Raynor, the CEO of the company’s property division, noted that approximately 23% of its London offices are now flexible workspaces, with occupancy rates exceeding 90%, indicating strong performance in this sector.
