Geopolitical and energy market risks could erase gains

The Outlook warns that this baseline is highly vulnerable to market volatility from crises and conflicts. Geopolitical tensions and volatile energy markets — particularly the Middle East conflict and Strait of Hormuz disruptions — pose acute risks .

Fertilizer price surge

• The report notes that farmers are "on the front line of rising energy and fertiliser costs" .
• The Strait of Hormuz closure (effective late February 2026) triggered a severe fertilizer supply shock. The World Bank's fertilizer price index rose more than 12 percent in Q1 2026, its sixth increase in seven quarters .
• Urea prices roughly doubled since the disruption began . The specific figures cited — fertilizer prices up 50% since the conflict began, urea up 80% since February to over $850/metric ton — are broadly consistent with the pattern of a near-doubling of urea prices post-Hormuz, though the exact percentages are slightly more granular than the rounded statements in the available FAO/World Bank sources .
• The FAO's own analysis notes the closure removed a "substantial volume of fertilisers and critical inputs from global trade, triggering an abrupt supply shock that cannot be quickly replaced" .
• Sulfur/sulfuric acid up over 1,000% since early 2025: This claim could not be verified from the specific OECD-FAO Outlook press release or the highest-authority sources obtained. The available sources confirm severe fertilizer market strain with nitrogen and phosphate prices rising sharply, but do not cite a precise 1,000% figure for sulfur/sulfuric acid in the context of the Outlook .

Disproportionate impact on low-income countries

• The report states that if the 33 percent average surge in energy prices observed in the first half of 2026 continues, global grain production would decline by 0.9 percent in 2027, and more sharply — by 1.7 percent — in low-income countries .
• High-income countries will likely absorb these shocks, but low-income countries face deteriorating food security, with households forced to reduce food consumption and shift to cheaper items .
• The Strait of Hormuz disruption has been felt most acutely by major Asian importers and developing nations dependent on fuel and fertilizer shipments .

Stochastic modeling: 25% probability of lower incomes

The Outlook's own stochastic analysis — which models the frequency of recent shocks — finds that if the frequency of shocks observed in recent years continues, there is a 25 percent probability that agricultural incomes in 2035 will be lower than current levels . Short-term risks are also significant: recent energy price hikes and resulting reductions in fertilizer use are likely to affect agricultural production in 2027 .

Summary of confirmed findings

The central tension of the report is clear: productivity gains support a modest 9% income rise, but the return of frequent supply shocks — already materialized via the Hormuz closure — creates a one-in-four chance that the decade's gains are entirely wiped out, with the poorest countries bearing the brunt.

Geopolitical and energy market risks could erase gains

The Outlook warns that this baseline is highly vulnerable to market volatility from crises and conflicts. Geopolitical tensions and volatile energy markets — particularly the Middle East conflict and Strait of Hormuz disruptions — pose acute risks .

Fertilizer price surge

• The report notes that farmers are "on the front line of rising energy and fertiliser costs" .
• The Strait of Hormuz closure (effective late February 2026) triggered a severe fertilizer supply shock. The World Bank's fertilizer price index rose more than 12 percent in Q1 2026, its sixth increase in seven quarters .
• Urea prices roughly doubled since the disruption began . The specific figures cited — fertilizer prices up 50% since the conflict began, urea up 80% since February to over $850/metric ton — are broadly consistent with the pattern of a near-doubling of urea prices post-Hormuz, though the exact percentages are slightly more granular than the rounded statements in the available FAO/World Bank sources .
• The FAO's own analysis notes the closure removed a "substantial volume of fertilisers and critical inputs from global trade, triggering an abrupt supply shock that cannot be quickly replaced" .
• Sulfur/sulfuric acid up over 1,000% since early 2025: This claim could not be verified from the specific OECD-FAO Outlook press release or the highest-authority sources obtained. The available sources confirm severe fertilizer market strain with nitrogen and phosphate prices rising sharply, but do not cite a precise 1,000% figure for sulfur/sulfuric acid in the context of the Outlook .

Disproportionate impact on low-income countries

• The report states that if the 33 percent average surge in energy prices observed in the first half of 2026 continues, global grain production would decline by 0.9 percent in 2027, and more sharply — by 1.7 percent — in low-income countries .
• High-income countries will likely absorb these shocks, but low-income countries face deteriorating food security, with households forced to reduce food consumption and shift to cheaper items .
• The Strait of Hormuz disruption has been felt most acutely by major Asian importers and developing nations dependent on fuel and fertilizer shipments .

Stochastic modeling: 25% probability of lower incomes

The Outlook's own stochastic analysis — which models the frequency of recent shocks — finds that if the frequency of shocks observed in recent years continues, there is a 25 percent probability that agricultural incomes in 2035 will be lower than current levels . Short-term risks are also significant: recent energy price hikes and resulting reductions in fertilizer use are likely to affect agricultural production in 2027 .

Summary of confirmed findings

The central tension of the report is clear: productivity gains support a modest 9% income rise, but the return of frequent supply shocks — already materialized via the Hormuz closure — creates a one-in-four chance that the decade's gains are entirely wiped out, with the poorest countries bearing the brunt.