Global Food Crisis Looms as Fertilizer Shortages and El Niño Threaten Crop Yields

A global food crisis could hit next year, according to a new report from JPMorgan. The bank warns that global food costs may climb 5% in the first half of 2027, up from the current US food inflation rate of 3%. This increase is likely due to a shortage of nitrogen fertilizer, which accounts for about a third of the world's production and is essential for around half of the world's crops.

The report also highlights the risk of a 'very strong' El Niño event during the winter and fall of 2026, with a 90% chance of such an occurrence. This can impact crop yields worldwide, particularly in Asia and Latin America. China is better prepared for this crisis than the US, as it has been building up its fertilizer and crop stockpiles.

According to Qu Dongyu, director-general of the Food and Agriculture Organization of the United Nations, 'Agriculture operates within a crop calendar that cannot be postponed.' If fertilizers do not arrive on time, yields are reduced, regardless of what happens later. The US has been using its oil reserves to weather shortages caused by the Strait of Hormuz closure, but it may not have enough time to build up a food and fertilizer stockpile in time for the 2027 shortage.

The report emphasizes that 'food security is national security,' making crop yields a matter of national security. JPMorgan has warned before that food shortages could represent a national security issue for countries, including the US.