The 2027 harvest is being priced now.
Three shifts will set your input costs, your supply and your demand over the next eighteen months. Two are on the farm. One is on your customers’ plates.
The CEO page · three shifts, what they mean, what to decide
01Inputs
Fertiliser is the slow fuse of the Hormuz crisis.
What changed
Urea jumped more than 80% from February to April as Gulf shipping froze, then fell back to about $400 a tonne. Phosphate did not: DAP is still near $800. And attacks on shipping in early October were the most of any month since the war began.
What it means for you
Farms that cut back on fertiliser this season harvest less next season. The cost lands in crop prices in 2027, not in 2026: after most budgets are set.
The decision
Lock 2027 supply for your most fertiliser-intensive crops now, or wait for fourth-quarter prices?
02Supply
El Niño moves the squeeze into 2027.
What changed
El Niño formed in July and is set to strengthen through December and last until April. Australia’s wheat crop is forecast down 26%. World cereal prices are up 17% on a year ago, and cocoa is expected to peak in early 2027.
What it means for you
Wheat, cocoa and palm oil stay expensive into the first half of 2027. Import-dependent markets in the Middle East and North Africa feel it first. Argentina is the one large supplier likely to gain.
The decision
Extend forward cover on wheat and cocoa into mid-2027, and qualify a second origin before you need it?
03Demand
Your customers are eating less, on purpose.
What changed
One in five US households now includes someone on a GLP-1 weight-loss drug. Users eat about 40% fewer calories, and their grocery baskets are 4–6% smaller. PepsiCo, Coca-Cola and Kraft Heinz are already rebuilding their ranges around it.
What it means for you
Indulgent categories lose volume first, then any market where these drugs get cheaper. Protein, fibre and smaller portions win shelf space.
The decision
Which fifth of your range is most exposed, and what is your smaller, higher-protein answer?
Also this month The EU’s deforestation rules apply to large and medium firms from 30 December: cocoa, coffee, soy, palm oil, cattle, rubber and wood must be traceable to the plot.
Inside the strategy pack · Shift 02 · Supply
El Niño moves the squeeze into 2027.
A strong El Niño is now the base case for the next six months. It hits the crops North Africa and the Middle East import most, just as fertiliser costs bite.
Australia’s 2026–27 wheat crop, to 26.7m tonnes. Exports forecast down 31%.
ABARES via S&P Global, Aug 2026World cereal prices in September against a year earlier. Up 5% in one month.
FAO, 2 Oct 2026NOAA’s odds of at least a strong El Niño during Brazil’s planting season. It lasts until April.
NOAA via S&P Global, Aug 2026Expected cocoa peak per tonne, early 2027. Côte d’Ivoire’s crop forecast down 17.5%.
BMI, Aug 2026Crude palm oil per tonne in July, up 12% on a year. Malaysia’s output forecast down 3%.
S&P Global, Aug 2026What it means, by team
Procurement. Australian wheat leaves the market just as other exporters have to cover more buyers. Expect wider premiums on milling wheat into the first half of 2027.
Pricing. Bakery, confectionery and fried-snack margins narrow first. Price moves planned for spring may need to come forward.
Finance. Working capital rises with higher inventory costs, and currency moves in import-dependent markets add to the bill.
Options on the table
Our call · scored in May 2027
FAO’s cereal price index will be higher in March 2027 than in March 2026.
70% confident
What would change our mind El Niño weakening before January, or the large wheat exporters raising shipments faster than expected. Either would ease wheat first, cocoa later.
Watchlist · before the next brief
- WeeklyHormuz transits and incidentsA second rise in attacks would hit urea first. Lloyd’s List counted at least 28 in the first half of October.
- Early NovFAO food prices for OctoberA second monthly rise in cereals would confirm shift 02.
- Oct–DecEl Niño at its peakWatch rainfall in Brazil, Southeast Asia and West Africa’s cocoa belt.
- 30 DecEU deforestation rules applyLarge and medium firms first; small firms from 30 June 2027.
Our calls this month
- Phosphate (DAP) averages above $700 a tonne in the first quarter of 2027.65% · scored April 2027
- FAO’s cereal index is higher in March 2027 than in March 2026.70% · scored May 2027
- Cocoa futures average above $5,500 a tonne in the first quarter of 2027.60% · scored April 2027
Track record starts with this brief: 0 of 3 calls scored so far. See the scorecard
Facts as of 2 November 2026. Sources: FAO; S&P Global; BMI; World Bank via Fertilizer Daily; Lloyd’s List Intelligence; Reuters; SGS. The calls are our judgement.