From fertilizer shocks to farm resilience: Why regenerative agriculture matters

Recent disruptions to global trade and energy systems have once again exposed the fragility of interconnected supply chains that many have long taken for granted. While much of the immediate attention has focused on rising energy prices and disrupted trade routes, the implications for food and agriculture are just as profound.

A significant share of the world’s fertilizer production and trade is concentrated in the Gulf region, with around a third of global urea and a substantial portion of ammonia exports originating there. As the conflict has disrupted shipping routes and production facilities, fertilizer prices have surged. According to the United Nations, millions of tonnes of fertilizer trade have been stalled, while higher input costs are raising production expenses for farmers and increasing the risk of lower harvests in the months ahead.

This matters because fertilizers are not a marginal input; they sit at the heart of modern agricultural systems. When their availability or affordability is compromised, the effects cascade quickly through the food system. Farmers are forced to make difficult decisions about how much to manage their crops and their input costs.

In parts of Africa, Asia and Latin America, these pressures are even more acute, with direct implications for food prices and food security.

While recent disruptions have brought these issues into sharper focus, many of the underlying challenges facing agriculture are not new. Farmers around the world have long been navigating climate volatility, soil degradation and rising input costs – pressures that predate current geopolitical events and will continue beyond them.

For Nestlé, these challenges are not new. They reflect structural vulnerabilities that we as a company have been working to address for many years through our commitment to regenerative agriculture and more resilient sourcing systems. This long-term approach is embedded in our intention to advance regenerative food systems at scale and how it creates shared value.

However, recent disruptions are a reminder of the structural challenges faced by global agriculture. It remains highly dependent on fossil fuel-derived inputs and centralized supply chains that are vulnerable to shocks. Against this backdrop, regenerative agriculture is increasingly being recognized not only as an environmental solution, but as a core resilience strategy for agricultural systems and supply chains. By reducing dependency on external inputs, improving soil performance and stabilizing yields, it can help farmers and businesses better manage volatility and secure long-term production.

At its core, regenerative agriculture is about restoring the natural systems that underpin farming. Practices such as crop rotation, the use of cover crops (especially leguminous), reduced tillage and agroforestry help rebuild soil health, improve water retention and support biodiversity. These are not abstract environmental benefits; they have direct implications for productivity and resilience. Healthier soils are better able to retain nutrients and moisture, which means crops are less exposed to drought stress, input costs can be reduced over time, and yields become more stable, particularly in challenging growing conditions.

One of the key levers within regenerative systems is the restoration of soil fertility through natural processes, including the use of legumes that capture nitrogen from the air. By integrating such practices into crop systems, farmers can gradually reduce their reliance on synthetic nitrogen fertilizers, mitigating both cost pressures and supply risks.

At the same time, there is significant potential to improve the efficiency with which fertilizers are used. Today, a considerable proportion of applied fertilizer is not absorbed by crops, often due to poor timing, inappropriate application methods, uniform or unique dosage application, or adverse weather conditions. More precise, data-driven approaches can help farmers apply fertilizers more strategically, ensuring they are used when and where they can be most effective. In the context of the current constrained supply, treating fertilizers as a scarce and valuable resource is an economic necessity, now more than ever – and a strategic advantage.

However, it is important to recognize that regenerative agriculture is not a quick fix. Transitioning to new practices takes time, investment and knowledge. Farmers operate in diverse contexts, from highly industrialized systems to smallholder farms, and solutions must be adapted accordingly.

This is why supporting farmers is essential. The transition to regenerative practices requires access to new solutions to optimize fertilization management, including precision application. It also demands practical support: agronomic advice tailored to local conditions, access to tools such as precision fertilization technologies, and financial mechanisms that help farmers manage risk during the transition period when yields and costs may fluctuate. There is also a need for investment in science and innovation to develop locally relevant solutions, from improved soil management techniques to new approaches to nutrient recycling, including the more effective use of all organic inputs, especially manure, to close nutrient loops and reduce reliance on synthetic inputs.

The role of the private sector is equally critical. In a globalized food system, companies have a role to play, working alongside farmers, policy-makers and others to support change. By working directly with farmers, investing in supply chains and supporting the adoption of regenerative practices, businesses can help build more resilient sourcing systems while contributing to broader environmental and social goals.

The current geopolitical context also brings into sharper focus the concept of food sovereignty and the interconnectivity of food and energy production, both from the usage point of view and as a source of energy through biomass production. As supply chains are disrupted and countries become more aware of their dependence on external inputs and imports, there is a growing emphasis on strengthening domestic production systems. Regenerative agriculture can play a role here as well, by enabling more self-sufficient and locally adapted farming systems that are less reliant on imported fertilizers and other inputs.

For Nestlé, regenerative agriculture is not a response to current events, but part of a longer-term commitment to strengthen agricultural systems over time. Farmers are already facing the effects of climate change, from unpredictable weather patterns to declining soil quality and rising costs. Supporting the transition to regenerative systems is therefore not only about reducing environmental impact, but about helping to futureproof the sourcing of key ingredients and strengthen farmer livelihoods.

By 2030, Nestlé aims to source 50% of key ingredients from farmers adopting regenerative agriculture practices, reflecting a broader commitment to building resilience across our value chain. As of 2025, Nestlé progress on this commitment had reached 27.6%, showing that a transformation of our agricultural supply chains is at play.

Ultimately, the lessons from the current crisis are clear. The stability of global food systems cannot be taken for granted, and resilience must be built into the foundations of how food is produced. This requires a collective effort, bringing together farmers, businesses, policy-makers and researchers to accelerate the transition towards more sustainable and resilient agricultural systems.

There is no single solution, and no one actor can address these challenges alone. But the direction of travel is becoming clearer, even if the path forward will differ across regions and systems. By investing in regenerative agriculture, restoring our soils, improving the efficiency of resource use and supporting farmers through the transition, it is possible to reduce vulnerability to external shocks while building a more stable and sustainable food system for the future.

In a world defined by uncertainty, resilience is no longer optional – it is essential.