The food supply chain, step by step
Every item in your grocery cart traveled a long journey:
1. Fertilizer production — Natural gas and minerals are turned into fertilizer. The Strait of Hormuz handles 49% of global urea and 30% of ammonia exports. Both are now blocked.
2. Farming — Farmers use fertilizer, diesel-powered machinery, and irrigation to grow crops. Diesel is up 28%, fertilizer up 25%+, and spring planting is weeks away.
3. Harvesting and processing — Crops are harvested, cleaned, and processed into food products. Processing plants run on natural gas and electricity — both getting more expensive.
4. Packaging — Most food packaging uses petroleum-based plastics, metals, and adhesives. All are rising with oil prices.
5. Transportation — Food moves by truck (diesel), ship (bunker fuel), train (diesel), and plane (jet fuel). Every mode is more expensive.
6. Distribution — Warehouses need climate control (electricity and gas). Cold chain logistics are especially energy-intensive.
7. Retail — Grocery stores run on electricity for refrigeration, lighting, and HVAC. Higher energy costs get passed to shoppers.
Why the Iran war breaks every link
The war’s impact on the Strait of Hormuz creates a cascade failure across the entire chain. It’s not just about oil — it’s about fertilizer, shipping routes, energy costs, and the raw materials for packaging. When one link breaks, every downstream link is affected.
Sources: CNBC, Food Ingredients First