Energy and fertilizer costs in agriculture are rising again: Risk of new pressure on food prices

While farmers' production costs are rising again in Europe, the increase in energy and fertilizer prices is becoming one of the factors that may put additional pressure on food prices in the coming period.

According to Eurostat data, the average price of goods and services used in the agricultural sector in the European Union increased by 4.7 percent in the second quarter of 2026 compared to the same period last year.

The most striking part of the increase was experienced in energy and fertilizers.

The average price of energy and lubricants used in agriculture increased by 22 percent, and the price of fertilizers and soil improvers increased by 13.4 percent.

The increase in Portugal is much lower than the EU average

The annual increase in agricultural production inputs in Portugal remained at 1.2 percent.

This rate is one of the lowest increases recorded in the EU, along with Hungary. For comparison, in Lithuania the increase reached 16.4 percent in the same period.

Therefore, the 4.7 percent cost increase across Europe should not be interpreted as an increase that is directly reflected equally on all Portuguese farmers.

However, since inputs such as energy and fertilizer are affected by international markets, the continuation of high prices in these areas also poses a risk for production costs in Portugal.

Producer prices fell in the same period

Another striking detail in Eurostat data is that while the prices of inputs used by farmers are increasing, agricultural prices are increasing. The average sales price of production has fallen by 5.8 percent annually across the EU.

This situation can create two-way pressure for the producer: while some basic inputs used in production become more expensive, the price of the agricultural products produced does not move in the same direction.

This does not mean that market prices will increase immediately

The increase in production inputs is not necessarily reflected directly and immediately in the market price paid by the consumer.

Food prices are determined by many factors such as processing, packaging, logistics, energy, retail margins, international commodity prices, supply-demand conditions and weather conditions, as well as agricultural production costs.

However, the long-term rise in energy and fertilizer costs is one of the factors that may create price pressure in subsequent production periods.

The Portuguese government also announced an extraordinary support of 20 million euros to the agricultural sector this year in order to reduce the impact of the increase in energy and fertilizer costs.

Within the scope of the support, 28 euros per hectare for suitable irrigated agricultural areas, 12 euros per hectare for dry agricultural areas and support per animal for certain livestock activities are envisaged.

Resources

Eurostat, 10 September 2026

https://ec.europa.eu/eurostat/web/products-eurostat-news/w/ddn-20260910-2

ECO, 18 September 2026

https://eco.sapo.pt/2026/09/18/custos-agricolas-sobem-e-ameacam-pressionar-ainda-mais-precos-dos-alimentos/

Portugal government

https://portugal.gov.pt/gc25/comunicacao/comunicados/governo-aprova-apoio-para-compensar-aumento-dos-custos-de-producao-agricola