Australian Farmers Shift to Low‑Fertiliser Crops as War Drives Costs

In the upcoming planting season, growers across Australia are shifting away from high‑fertiliser staples such as wheat and canola toward crops that require less nitrogen, notably barley. The change follows a sharp increase in the price of urea—about 60% higher since the onset of the conflict in Iran—and a steep rise in diesel costs, both of which have inflated overall production expenses.

Why the Shift?

• Fertiliser Dependence: Early crop growth hinges on nitrogen; higher costs force farmers to reduce or replace nitrogen‑heavy crops.
• Reduced Acreage: Some producers are trimming total planted area, though the impact is modest compared to crop‑choice changes.
• Projected Declines: Analysts forecast a 10%–12% drop in wheat planting, down from last year’s 12.4 million hectares. Canola acreage is also expected to shrink despite its higher profit margin.

Global Context

Australia remains a key exporter of wheat and canola to Asia, the Middle East, and Europe. However, the war has disrupted fertiliser supplies through the Strait of Hormuz—handling roughly 30% of global fertiliser trade. Global urea shipments could fall by up to 70%, pushing prices higher and complicating farmers’ access to essential nutrients.

Other nations face similar pressures:

• United States: 2026 plans favor soybeans over corn.
• China: Limited its own fertiliser exports.
• India: Seeking alternative sources for summer crops.

Financial Strain and Strategic Response

With fertiliser and fuel costs surging, Australian farmers are reevaluating crop portfolios. The trend leans toward lower‑cost options that still satisfy market demand, marking a significant shift in the agricultural landscape.