Summary

The already fragile two-week ceasefire between the United States and Iran appeared to give way over the weekend, after talks in Islamabad collapsed and President Donald Trump ordered a U.S. naval blockade of the Strait of Hormuz, a critical node for global energy and commodity flows. Trump said in a Saturday Truth Social post that he was “watching fertilizer prices CLOSELY during our FIGHT FOR FREEDOM in Iran.” “The United States will not accept PRICE GOUGING from the fertilizer monopoly! American Farmers, we have your back,” he added. For the global fertilizer market, uncertainty is already baked in. Even if an agreement is eventually reached and shipping resumes, industry analysts and market participants see little hope for a complete reversal of the sharp price increases and supply disruptions triggered by the war. The six-week-long closure of the Strait of Hormuz has had widespread effects across the global economy, contributing to an energy crunch that pushed up oil and gas prices and disrupted supply chains. Among the industries most directly affected is fertilizer, which depends heavily on both energy inputs and steady global shipping flows. The disruption is acute for nitrogen fertilizers such as urea. Nearly half of global urea exports originate in countries west of the Strait of Hormuz and depend on the route to reach global markets. Fertilizers like these make up somewhere between 33% and 45% of operating expenses for major American corn and wheat crops, according to nonprofit Family Farm Action. “The price of [dry urea] in January to February was $560 per ton,” Ben Vig, a farmer and former state representative in North Dakota, told Responsible Statecraft. “At the end of March it was $770 per ton.” According to Vig, that amounts to costs of $140 per acre to fertilize wheat and $135 per acre to fertilize corn, an increase of nearly $40 per acre. Even though about three-quarters of the fertilizer used in the United States is produced inside the country, domestic costs are nonetheless dependent on the international market. The United States relies on imports of ingredients (potash, phosphate, nitrogen) used in fertilizers made here, as well as fertilizers themselves, such as ammonia and urea, whose production depends heavily on natural gas. Disruptions to gas supplies and rising energy costs in the gulf are pushing prices even higher for American farmers. "Our biggest struggles are our inputs, be it fertilizer, seed, chemical, parts," one farmer in Nebraska recently told PBS. "There has been so much drastic markup in all of these. And I just kind of feel like the farmer's kind of painted in the corner." The Gulf is not just a transit route but a major production hub for fertilizer tied to the region’s natural gas supplies. During the height of the conflict, key producers were effectively cut off from global markets, while some facilities were forced to slow or halt operations as gas shipments stalled. A group of Democratic lawmakers warned the secretary of agriculture late last month that “the supply side pressure will push prices up even further as nations that are dependent on supply from the Gulf seek alternate sources.” A reopening of the strait would not immediately restore production because facilities may take weeks to restart and ramp up. Because both fertilizer imports and the inputs used to produce it are being disrupted, farmers are facing a tight squeeze, leading to both higher prices and uncertainty over supply. At the same time, even if the conflict pauses in the near future, uncertainty is likely to keep shipping costs elevated, as insurers and vessel operators wait for clearer signs that the region has stabilized. “Prices could ease further into Q2 to Q3 if the ceasefire is extended, though they are likely to remain above 2025 averages due to lost volumes and higher financing and insurance costs,” Deepika Thapliyal, a global fertilizer analyst with the Independent Commodity Intelligence Services, told Farm Progress. “Any breakdown in talks would quickly tighten the urea, ammonia and sulfur supply and lead to more spikes.” The timeline for recovery may not align with the realities of the agricultural season. Even if shipments begin to move again, the structure of the fertilizer supply chain and the timing of the disruption mean relief may not come quickly. “To get product from around the world, we have to put the order in, and once we put the order in, it takes four weeks for a cargo ship to go from one side of the planet to another, and then it all goes to [an import hub in] New Orleans, and it takes three to four weeks from a cargo ship to a barge, and then the barge up the river,” Vig told RS. “So, we’re looking at maybe a seven-week period.” With the Midwest planting season in April and May, some farmers did place their spring orders before the current spike, but many others either locked in fertilizer at elevated prices or cut back orders. Roughly one-quarter of farmers had not placed their orders by early April, according to the Department of Agriculture, and will now be left scrambling to secure supply if shipments resume. As fertilizer prices surge at a critical moment for planting, some lawmakers are becoming increasingly concerned that the disruption could lead to a crisis. “In addition to the needless loss of life in the Middle East, fertilizer and diesel costs are skyrocketing at the beginning of growing season, adding to the struggles farmers have faced since the beginning of President Trump’s second term,” Sen. Peter Welch (D-Vt.), who sits on the Senate Committee on Agriculture, told RS in a statement. “At a time when global food insecurity was already on the rise due to this administration’s aid cuts and climate change, this war threatens to turn global hunger into a full-blown crisis.” Without a sustained de-escalation that restores both production capacity and confidence in global shipping routes, the fertilizer market is likely to remain tight, with the risk that today’s disruption leads to lower crop yields and higher food prices in the months ahead. - Hormuz is not a tool to end the war but how Iran wins the aftermath › - Trump: US to block Hormuz, shooting ourselves & allies in foot ›