Rising costs for cereals: urea up 70% and diesel up 32%. Digital agriculture a support to safeguard margins. Italian pasta at risk

•  The cost per hectare has exceeded the critical threshold of €1,300 in the South and €1,500 in Central Italy. Agritech can deliver savings of up to €100 per hectare.
• Roberto Mancini (CEO of Diagram Group): ‘Innovation offers practical solutions to secure the country’s food sovereignty for the future’ 

Jolanda di Savoia (Fe), May 22, 2026 – The Italian cereal sector is in the grip of an unprecedented financial crisis. In April, the combination of plummeting wheat prices and soaring production costs pushed farms towards a structural liquidity crisis. 

According to the latest trend analysis by Diagram Group, the cost per hectare has exceeded the critical threshold of €1,300 in the South and €1,500 in Central Italy, figures that render traditional farming methods no longer economically viable. There is a real and immediate risk to the production of 100% Italian pasta, stemming from unsustainable budgets, a decline in cultivated land and pressure from foreign imports. 

“Innovation offers practical solutions to secure the future of the country’s food sovereignty. Precision farming allows profitability to be decoupled from market volatility,” comments Roberto Mancini, CEO of Diagram Group. 

Italian pasta at risk. The growing difficulty in generating sufficient revenue to cover production costs is seriously jeopardising the upcoming sowing season in Italy. The regions most at risk are Puglia, Sicily and Basilicata, where the pressure on margins for cereal farms is particularly high. This phenomenon is contributing, among other things, to a structural reduction in the number of businesses in the sector, with declines approaching 10% in some regions, such as Calabria. 

Domestic raw material deficit Italy faces a structural shortfall of around 2 million tonnes of durum wheat compared to the pasta industry’s requirements. The domestic harvest is insufficient to meet domestic demand, which is met through imports of around 7 million tonnes. Making the picture even more critical are the forecasts for the 2026–2027 season, which indicate a possible 4% drop in durum wheat production at European level. Italy is bucking the trend slightly, where production is expected to bring national volumes back to around 3.8 million tonnes compared to 3.6 million tonnes last season 

The Diagram report highlights a significant divergence between the trend in durum wheat prices and that of production costs, attributable to the so-called price-cost squeeze. Whilst in the main markets of southern Italy durum wheat prices are struggling to reach €280 per tonne, the costs borne by farms continue to rise at double-digit rates. 

The fertiliser crisis is weighing particularly heavily: the geopolitical crisis in the Strait of Hormuz has driven up prices for granular urea, which have risen by 69.6% compared to 2025, reaching $702 per tonne. The fuel situation is also exacerbating the picture, with agricultural diesel having exceeded the €1.20 per litre mark, representing a 31.7% increase year-on-year. 

The result is mounting pressure on the margins of cereal businesses, particularly in southern Italy, where production costs, at €318 per tonne, exceed the selling price. This trend results in a structural loss of 7%, even after deducting public aid. In this scenario of ‘operational survival’, digital innovation is a vital necessity. Diagram Group estimates that the adoption of digital technologies could generate direct savings of €90–100 per hectare. 

‘Thanks to variable rate application (VRA) and assisted guidance systems, it is possible to reduce fertiliser use by almost 20% and cut fuel consumption by up to 15%,’ emphasises Mancini. 

If digital technologies were extended to the 1.7 million hectares of land under wheat cultivation in Italy, the country would save over €150 million a year, improving competitiveness against foreign giants and reducing dependence on imports. Furthermore, digital technology enables carbon farming: carbon sequestration certification can generate additional revenue for farms of between €30 and €60 per hectare through the sale of credits (with 19 million already traded in Italy by early 2026). 

Despite the benefits, only 10% of the country’s agricultural land is managed using mature technologies. Diagram Group identifies two main obstacles in 2026: poor interoperability between machines from different manufacturers and a lack of technical skills, cited by 31% of business owners.