At first glance, energy markets and fertiliser might seem like two separate worlds. But in reality, the two are tightly connected and energy prices have become one of the most important drivers of fertiliser markets, particularly in the UK.

Many will remember the extreme surge in energy prices during 2022 and 2023, caused by post COVID demand and the sudden loss of Russian gas flows into Europe. While prices have calmed since then, the market hasn’t returned to “normal” and navigating recurrent pricing volatility has become an essential skill in protecting farm margin for all UK growers.

In recent weeks, conflict in the Middle East has been a driver for pricing volatility. While talk of a ceasefire may help calm day to day market swings, it does not immediately reset the market. Restarting production, restoring insured shipping routes, and normalising global supply flows takes time, often months rather than weeks.

By creating effective risk management strategies to respond to fertiliser pricing volatility, growers can be prepared no matter which direction the market takes. This isn’t about encouraging higher spending or reacting to short term swings; it’s about understanding the bigger picture so that planning, purchasing and risk management can be more informed and less stressful through the season.

In this blog, we’re going to talk more about the relationship between energy markets and fertiliser prices, how the related drivers impact UK growers and what you can do to protect your farm margins in 2026.

The relationship between energy and fertiliser markets

So what connects energy and fertiliser markets? The key link between them is natural gas, which isn’t just used to power production, but is also the essential feedstock for ammonia, which underpins all nitrogen fertilisers used in the UK, including:

• Ammonium nitrate (AN 34.5% / 33.5%)

• UAN (urea ammonium nitrate)

• Urea

• Calcium ammonium nitrate (CAN)

• NPK and NPKS blends containing nitrogen.

When gas prices rise, the cost of producing ammonia increases almost immediately. That means the entire nitrogen market, whether growers are using urea, UAN, AN, CAN, or NPKs, becomes more expensive to manufacture.

In extreme cases, higher gas costs can lead to reduced production. This is already a reality in the UK, where domestic ammonia production has largely stopped, leaving manufacturers and suppliers reliant on imported ammonia or finished nitrogen products across all forms. This increases exposure to global energy markets regardless of the nitrogen product being used on farm.

What is the global picture?

While pricing volatility affects all growers worldwide, the UK is particularly vulnerable to sudden change due to our limited domestic supply and reliance on fertiliser imports.

The United States, for example, has abundant domestic gas, strong pipeline networks and subsequently a continuous gas supply regardless of global drivers which helps keep production stable and prices predictable.

Europe, like the UK, is similarly dependant on imports and must compete with Asia for LNG supplies, mostly imported from the US.

However, the UK is arguably the most exposed market. We have limited gas storage, no domestic ammonia production and must import ammonia to produce ammonium nitrate as well as import all of our urea supplies, including UAN, CAN and NPKs. Because the UK no longer produces fertiliser from UK gas, our nitrogen markets are effectively tied to European TTF pricing, making UK prices react faster and more sharply to global shocks than almost anywhere else.

What’s driving gas and fertiliser prices right now

Several forces are currently shaping the energy environment, all with knock on effects for fertiliser:

1. World politics

Conflict in the Middle East and Eastern Europe continues to disrupt gas flows, LNG supply and global shipping patterns, making it harder to export supplies.

2. Weather

Cold winters drive heating demand across Europe while heatwaves increase electricity generation elsewhere - both pull heavily on gas and create additional demand to compete with fertiliser production.

3. Storage levels

EU gas storage is far below normal levels, currently around 28% versus 75% this time last year, which is equal to only 22–25 days of demand. Europe is entering the refill season, April to October, with its weakest buffer for years. The UK is significantly more exposed with very limited storage, holding just 1–3 days of national demand.

With EU inventories at just 28% today, gas markets face heightened strain going into refill season, creating direct and substantial upward pressure on nitrogen fertiliser prices (urea, AN, UAN, CAN and NPKs) through the rest of 2026.

4. Shipping and logistics

Delays, rerouted vessels, higher insurance and chokepoint disruption all reduce LNG availability and push up costs.

5. Global competition

Europe, and especially the UK, must compete against Asia for cargoes. When Asia bids higher, Europe pays more.

What this means for UK fertiliser prices

We are now in a market driven more by risk than pure supply and demand.

High or unstable energy prices don’t always cause immediate fertiliser rises, but they increase the probability and scale of volatility. Prices can move quickly, sometimes overnight, and often long before physical product becomes tight.

For growers, that uncertainty complicates budgeting and buying decisions.

How to protect your farm

After several seasons of extreme intra season price swings, we’re encouraging growers to proactively build pricing risk management strategies into their business as a way to prepare for sudden price changes.

Success in this environment requires:

• Informed planning, not guesswork

• Earlier engagement with supply channels

• Realistic expectations about pricing behaviour

• A focus on margin through driving yield, not just cost-cutting

• Efficient and effective programs to help reduce passes and manage costs

• Better tools for managing price risk.

  Risk management schemes

We recommend growers consider fertiliser risk management schemes, such as Frontier’s Flexi-N tool, to support them in difficult seasons and mitigate against the potential risk of sudden price hikes. Engaging in a scheme like this can help protect against the extremes of pricing volatility through the season and guarantee nitrogen supply at a time when global logistics are under pressure.

Focusing on return over initial spend

It’s natural to consider reducing nitrogen when markets are uncertain. In some situations, adjustments are justified, but broad, sweeping cutbacks are risky.

For strong crops, the cost of lost yield often outweighs savings on fertiliser. Maximising output remains one of the most effective ways to protect margin, as higher yields spread fixed costs such as rent, labour and machinery.

In 2026, when margins are as tight as they’ve ever been, we’re talking more frequently with growers about how to get the balance right between reducing spend and pushing for maximum yield and higher returns later in the season.

Key volatility drivers for 2026

It’s impossible to predict everything that could happen in the fertiliser markets during the course of the season, but watching some key market drivers can help you spot signs of market change early.

In 2026, growers should be staying aware of:

• Natural gas and LNG prices

• The Middle East conflict and Russian-related sanctions

• Shipping disruptions (Strait of Hormuz, rerouting, insurance)

• EU/UK regulatory changes (CBAM, tariffs, environmental rules)

• Supply concentration among a small number of major exporting nations

• Climate-driven weather extremes (demand and production impacts).

Managing your risk

In unpredictable markets, over-preparation is key. Our advice to growers is to take a three-point approach to managing fertiliser pricing risk:

1. Build a risk management strategy into your business plan at the start of the season, considering what tools are available to help you navigate volatility

2. Monitor key market drivers weekly to sense risk early and take action in good time to protect your investment. If you’re not signed up to our weekly fertiliser and grain market update Frontrunner, make sure to subscribe for the latest information.

3. Consider how you can best protect your margins and get the balance right between cost-cutting early in the season and pushing for high returns come harvest.

Nobody can eliminate risk entirely, but by taking these steps, you can put yourself in the best possible position to manage fertiliser markets to your favour this season.

For further help and support with crop nutrition planning, Flexi-N, risk management or cash flow, please speak to your Frontier advisor or contact our team directly by phone on 0800 227 445 or by email at info@frontierag.co.uk