The Food and Agriculture Organization's Food Price index has significantly risen, and Agricultural futures markets are saying that prices will be increasing even more.
While food costs have been skyrocketing overall due to climate change, the conflict in Ukraine is resulting in even more inflation.
In addition to food prices increasing, the cost of conventional fertilizers is now three times the 10-year historical average.
Russia is the largest exporter of nitrogen for fertilizer, and with Belarus, they're responsible for 40% of the EU's imports of potash. Russia is also a massive supplier of gas to fertilizer producers and gas supply disruptions have been deeply impacting the production of ammonia in Europe.
A typical European farm spends about 5% of its costs on fertilizers, 8% on energy, and 25% on feedstuffs, which means compound price increases will most likely see inflation rise.
Long-term and cleaner pathways to fertilizer production such as water electrolysis will start to become more important, but it will require investment.
In response to the situation, food service firms have the leverage to rethink their food procurement.
