JPMorgan Warns of New Food Price Surge in 2027 as Global Risks Mount

The recent easing in some food prices may prove short-lived, with JPMorgan warning that a new wave of food inflation could hit consumers in 2027 as geopolitical, energy and climate risks converge.

The bank estimates that global food inflation could accelerate to around 5% in the first half of 2027, compared with roughly 2.7%–2.8% during the same period in 2026.

The warning is not based on fears of an outright global food shortage. Instead, JPMorgan sees the possibility of a “compounding storm” in which higher agricultural costs, disruptions to shipping and fertilizer supplies, and extreme weather combine to push prices sharply higher.

Global Food Inflation Could Rise to 5%

JPMorgan's projections suggest food inflation could nearly double from current levels during the first half of next year.

Such an increase could add around 0.6 percentage points to overall global inflation, complicating expectations that price pressures will continue to ease in 2027.

The impact would not necessarily be felt equally around the world. Developing economies in parts of Asia, Africa and Latin America could face greater pressure because food accounts for a larger share of household spending and agricultural production is often more vulnerable to extreme weather.

Strait of Hormuz Puts Fertilizer Supplies at Risk

One of the biggest concerns lies far from supermarket shelves: fertilizer.

The Middle East accounts for roughly 42% of global urea exports and 27% of ammonia exports, making the region crucial to the global supply of nitrogen fertilizers.

That makes the Strait of Hormuz important not only for oil and natural gas markets but also for agriculture.

Any prolonged disruption to shipping through the region could restrict fertilizer supplies and drive prices higher. Farmers would then face higher production costs, which could eventually be passed on to consumers through more expensive food.

JPMorgan data cited in recent reports indicate that nitrogen fertilizer prices surged by roughly 25% to 50% between late February and April, although some fertilizer prices have since retreated from their peaks.

A Powerful El Niño Could Make Matters Worse

Climate is the second major risk.

JPMorgan is examining the potential impact of a particularly powerful El Niño, which could disrupt rainfall and temperatures across major agricultural regions and reduce crop yields.

Historically, El Niño events have been associated with an average decline of around 3.5% in agricultural production in tropical regions, although the impact varies significantly by country and crop.

According to JPMorgan's estimates, a strong El Niño alone could add around 0.7 percentage points to global food inflation at its peak.

Combined with higher energy costs, the overall impact could rise to approximately 1.3 to 1.5 percentage points.

Warning Signs Are Already Emerging

The risks are not entirely theoretical.

Pressure on grain transportation and exports from the Black Sea region has added uncertainty to international agricultural markets, while the Lykavitos report notes that Chicago wheat futures had risen by more than 17% since the beginning of July as buyers looked for alternative sources of supply.

The key question is whether several adverse developments will occur at the same time.

Geopolitical conflict, expensive fertilizers, shipping disruptions and extreme weather would represent a particularly difficult combination for the global food system.

What It Could Mean for Consumers in 2027

JPMorgan's warning is a risk scenario rather than a certainty. Fertilizer prices have already eased from some of their earlier peaks, illustrating how quickly conditions can change.

But if the bank's more adverse scenario materializes, households could face another significant increase in grocery bills in 2027, just as many consumers are beginning to see relief from the inflation shock of recent years.

The concern is therefore not that food will suddenly disappear from shelves. It is that producing and transporting it could become considerably more expensive — and consumers may ultimately have to pay the bill.

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