JPMorgan warns global food prices could rise 5% amid crises
A fertilizer supply crunch and a looming super El Niño could push food inflation nearly double its current rate by early 2027, the bank says.
JPMorgan is sounding the alarm on what it calls a “compounding storm” for global food prices. In a report published July 24 titled “Food Security is National Security,” the bank projects that global food inflation could hit roughly 5% on an annualized basis in the first half of 2027, nearly doubling from an estimated 2.8% in the first half of 2026.
The culprits: a fertilizer supply chain fractured by Middle East conflict and a super El Niño weather pattern that refuses to quit. Together, these forces could add an extra 1.3 to 1.5 percentage points to peak global food inflation and tack on 0.3 to 0.6 percentage points to overall headline inflation worldwide.
Two crises, one grocery bill
The first pressure point is nitrogen fertilizer, the invisible ingredient behind most of the world’s crop yields. The ongoing conflict in Iran and closures of the Strait of Hormuz have throttled a critical chokepoint for global fertilizer trade. The Middle East accounts for approximately 42% of global urea exports and about 27% of ammonia exports. Roughly one-third of the world’s nitrogen fertilizer transits through the Strait of Hormuz.
The second force is meteorological. JPMorgan’s report, authored by analyst Nora Szentivanyi, notes an 81% probability of a super El Niño forming by late 2026, with a 97% chance that those conditions persist into 2027. A super El Niño alone could contribute roughly 0.7 percentage points to peak food inflation.
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Emerging markets bear the heaviest burden
The pain won’t be distributed evenly. JPMorgan’s analysis highlights that emerging markets in Asia and Latin America face disproportionate risk. Countries like India, Indonesia, Brazil, and Colombia check every box on the vulnerability list: high food price weighting in their Consumer Price Index baskets, heavy dependence on fertilizer imports, and agricultural sectors that live and die by weather patterns.
In many of these economies, food represents 30% to 50% of the CPI basket. Compare that to the US, where food accounts for a much smaller share of the inflation gauge.
For context, the USDA’s own July 2026 Food Price Outlook projects a more modest 2.9% increase in food-at-home prices for 2027 in the US. But even that baseline estimate flags categories like beef as potential outliers that could run hotter.