Shipping bottlenecks tied to Iran conflict drive sharp cost increases during peak planting season.
By yourNEWS Media Newsroom
Global fertilizer prices have risen sharply as disruptions tied to the Iran conflict constrain shipments through a critical maritime route, placing added pressure on farmers entering the spring planting season.
A report by The Epoch Times states that fertilizer markets are being affected by reduced traffic through the Strait of Hormuz, a key passage for materials derived from natural gas used in crop production.
Roughly 30 percent of the world’s fertilizer supply moves through the strait, according to data cited from the International Food Policy Research Institute. Shipping volume has declined significantly, with United Nations figures showing a drop from more than 100 vessels per day to fewer than 10.
The reduced flow has coincided with price increases across multiple fertilizer categories. Data from agricultural analytics firm DTN shows urea prices climbed 35 percent over the past month, rising from $677 per ton to $826 per ton in the most recent week. Other products, including anhydrous ammonia and UAN32, recorded increases of about 20 percent over the same period.
Caleb Jasso of the Institute for Energy Research said, “The world is now learning just how important the Strait of Hormuz is. A great deal of trade of all kinds goes through that choke point, including a very sizable portion of the fertilizer market for the world.”
Estimates from IFPRI indicate that the strait handles 36 percent of global urea exports, 29 percent of ammonia exports, 26 percent of diammonium phosphate, and 13 percent of monoammonium phosphate.
Peter Earle, senior economist at the American Institute for Economic Research, said, “A large share of globally traded urea, ammonia, sulfur, and LNG-linked feedstock moves through the Gulf, so the war’s effect is being felt primarily through shipping disruption, marine insurance costs, and vessel delays, rather than outright destruction of production facilities.”
Earle added that timing is a significant factor. “The conflict is coming at nearly the worst possible time, the spring planting season, when Corn Belt growers are locking in nitrogen purchases for the highest-input crop in the U.S. agricultural system. If the bottleneck were to persist for several months, a likely outcome would include renewed food inflation pressure in the second half of the year, especially in protein-heavy and grain-based categories.”
Farm groups have warned that continued supply constraints could affect production. Cyndie Shearing, communications director for the Farm Bureau, said, “Unless the delivery of critical farm inputs such as urea, ammonia, nitrogen, phosphate, and sulfur-based products is strategically prioritized, the U.S. risks a shortfall in crops.” She described the situation as “a threat to our food security—and by extension our national security.”
U.S. farmers were already facing elevated input costs before the current conflict. In a March 10 letter to the U.S. attorney general, leaders from 14 state corn growers associations wrote that “crop prices remain depressed, while the costs of essential nutrients continue to reflect a market distorted by excessive concentration. … Across every corn-producing region in the country, farm families are operating on razor-thin margins at best – and at a net loss in many cases.”
They also cited DTN data indicating fertilizer prices had increased by as much as $108 per ton over the previous year.
Higher input costs are expected to ripple through the broader food system. Earle said increases in fertilizer prices will affect feed crops, livestock production, processed foods, and consumer prices across multiple categories.
Despite the global disruption, analysts say the United States may experience more price pressure than supply shortages due to domestic natural gas production and imports from Canada.
Earle noted that farmers may adapt through “substitution, logistics rerouting, and agronomic flexibility,” adding, “In the short run, the U.S. can draw more heavily from Canadian potash, North African nitrogen, Trinidad ammonia, and domestic nitrogen plants tied to U.S. natural gas versus Gulf-linked supply chains.”
He also said growers may shift acreage to crops requiring less nitrogen or use precision agriculture techniques to reduce input use.
Jasso said the situation highlights the importance of domestic production capacity. “This is definitely a reminder of the importance of leveraging the extraordinary production potential the United States has across the board, whether it’s oil or gas or fertilizer,” he said. “We have a very unique country that represents practically every industry on Earth, with an abundance of resources that can provide for not only our own domestic use but can be used to export to the world.”
The disruption underscores the link between energy markets and agriculture, as fertilizers remain heavily dependent on natural gas inputs and global trade routes.