A growing combination of fuel shortages and fertiliser supply risks is emerging as a far more serious threat to Australian agriculture than fuel alone, with industry leaders warning the dual pressure could directly impact whether crops are planted at all this year.
While diesel prices and supply constraints have dominated headlines in recent weeks, new data and industry warnings suggest fertiliser availability may prove the more critical constraint, particularly as winter sowing approaches.
Confidence down
The latest Rabobank Rural Confidence Survey shows farmers were already on edge before the current Middle East conflict escalated, with rising input costs a major concern across New South Wales.
Confidence dropped sharply to a net reading of -20 per cent in the first quarter of 2026, down from -3 per cent previously, with more farmers expecting conditions to worsen than improve.
Rabobank NSW state manager Toby Mendl said those concerns are now likely to intensify.
“The conflict in the Middle East is further compounding farmer concerns about the cost of doing business,” he said.
“Producers were already concerned about rising input costs, but now face more price pressure and volatility. This is especially challenging for grain growers planning winter crops amid uncertainty over the cost and availability of essentials like fuel and fertiliser.”
That uncertainty is now being echoed across the grains sector, where fertiliser availability is emerging as a critical bottleneck.
GrainGrowers has warned Australia has just six weeks of fertiliser supply on hand, with global markets under strain and supply chains disrupted by conflict in the Middle East.
The organisation says the issue goes beyond price, with availability itself now in question.
“Globally the fertiliser market is under significant strain, with the Middle East conflict impacting access and limiting availability,” GrainGrowers CEO Shona Gawel said.
“The fact that Australia is entirely reliant on imported urea with no domestic production expected until 2027 has left growers highly exposed.”
Crops may not be planted
Growers are now facing what the industry has described as a “double hit”, with both fuel and fertiliser costs rising while supply becomes less certain.
“As planting rapidly approaches, growers face tough decisions with availability of fuel and fertiliser uncertain and costs accelerating rapidly,” Ms Gawel said.
In some cases, those decisions may mean not planting at all.
“Limited or cost prohibitive access to fertiliser and fuel could mean that some growers will not be planting a crop in 2026, taking the significant financial hit that comes with that decision.”
Analysts warn that there may very significant disruption to food supply, with ripple effects that last for years, if grain crops are significantly down as a result of the crisis. The effects will not be limited to things obviously made of grain, like flour, past and bread becoming more expensive, but will affect the entire food chain, including meat.
But the impact of the crisis is already being felt well beyond cropping paddocks, with other fuel-intensive industries reporting extreme financial pressure and hard decisions.
The Dorney family in Bulahdelah, which operates a trucking and transport company as well as being farmers, has seen monthly diesel costs surge from about $220,000 to more than $400,000 in a matter of weeks.
To keep its fleet of 25 trucks on the road, the business has begun liquidating assets, including livestock.
“This example is not just a business under pressure—this is a community under threat,” Timber NSW chief executive Maree McCaskill said.
“Fuel is not something our industry can control, and the costs are now moving through every part of the timber and construction supply chain.”
Widespread impact
The warning signs are spreading across sectors, with transport, agriculture and construction all exposed to the same underlying pressures.
Industry groups say the broader risk is that rising input costs and supply constraints will begin to disrupt the flow of goods, from farm production through to building materials and food supply.
Country mayors across regional NSW have already raised concerns about the cascading impacts of fuel shortages, particularly as the sowing season approaches.
Country Mayors Association chairman Rick Firman said diesel supply is critical to ensuring food production continues.
“Remote, rural and regional NSW is the food basket of the State, it is imperative that we get the levers right in managing the fuel crisis if we are to ensure that produce from the regions continues to reach tables in the City,” he said.
“We need to ensure that a crisis in fuel does not generate a shortage of food, diesel in our rural, remote and regional communities is critical with sowing season about to commence for many.”
The association has been participating in state government roundtable discussions on diesel fuel security, bringing together farmers, freight operators, councils and industry representatives to identify solutions.
“It is invaluable having farmers representatives, bulk rural carriers, freight transport operators, civil construction businesses, public transport, petroleum distributors, motoring organisations and State and Local Government in the one place to discuss the problems that we are all encountering,” Mayor Firman said.
However, questions remain about whether supply issues are being fully acknowledged.
“Our Members are reporting huge price increases, particularly in diesel. While we respect the State and Federal Government’s assessment of the current situation, that supply is not an issue, but distribution is, we question why if there is sufficient supply the price is increasing at such an alarming rate,” he said.
Searching for solutions
Alongside the immediate crisis response, industry bodies are calling for structural changes to reduce Australia’s exposure to global shocks.
GrainGrowers has urged the federal government to establish a fertiliser supply taskforce, diversify import sources, create strategic reserves and accelerate domestic production.
Without those changes, the organisation warns the impacts could extend well beyond a single season.
“With some 24,000 grain farm businesses contributing $23B to Australia’s gross value of production the flow on impact on farms, regional communities and the national economy should not be understated.”
Experts say the current situation highlights deeper vulnerabilities in Australia’s agricultural system, particularly its reliance on fossil fuels and imported inputs.
Murdoch University Associate Professor Hanabeth Luke said agriculture is especially exposed to rising diesel costs due to its reliance on fuel-intensive operations.
“Planting, harvesting and managing crops requires a great deal of diesel, so rising prices and/or shortages will have an immediate impact on the hip-pocket of farmers,” she said.
She said fertiliser costs are also tied directly to global energy markets, with ammonia production relying heavily on fossil fuels.
“The main way it is produced is the Haber-Bosch process, which pulls nitrogen out of the air, and turns it into a usable form for plants. However, this process takes a lot of energy.”
With farmers already needing strong yields to break even, additional cost pressures are compounding financial risk.
Associate Professor Luke said while the challenges are significant, there are opportunities to build greater resilience.
“One potential solution is to plant more legumes,” she said, noting their ability to naturally fix nitrogen in the soil.
She also pointed to the potential for improved nutrient recycling, including using waste streams from cities and food production to create fertilisers, as well as emerging technologies such as algae-based systems to convert waste into usable inputs.
“These are examples of how scientists could strengthen Australia’s circular economy, turning waste into a resource,” she said.
“If we can see every challenge as an opportunity, and, as researchers, continue to ask the right questions, we can build a more resilient, sustainable and healthy agricultural system.”