Iran war impacts fertilizer
Consequences from the ongoing conflict in Iran have been rippling through the ag industry, and issues stemming from the effective closure of the Strait of Hormuz are impacting fertilizer supplies across the globe.
Nitrogen-based fertilizers have been particularly impacted by the ongoing conflict, with skyrocketing prices raising concern for farmers ahead of planting season.
Exports suffer
Exports from the Middle East have suffered greatly since the ongoing conflict in Iran first began.
Much of the natural gas produced in the Persian Gulf is processed into urea and other solid forms of fertilizer, and roughly one-quarter of global fertilizer production passes through the Strait of Hormuz.
Michael Werz, senior fellow at the Council on Foreign Relations (CFR), explains the effective closure of the Strait of Hormuz and the war have impacted trade and production in countries including Bahrain, Oman, Qatar and Saudi Arabia, which are critical exporters of fertilizers like urea, diammonium phosphate and anhydrous ammonia.
“With shipping activity through the Strait of Hormuz affected, the effect on global fertilizer exports is enormous and will generate cascading effects,” Werz writes in a March 13 CFR article. “The shipment of natural gas has declined precipitously, which affects feedstock for nitrogenous-based fertilizers.”
Werz adds the war is putting one-third of global fertilizer trade at risk of disruption, and coupled with fertilizer losses suffered during the 2022 war in Ukraine and growing Chinese export restrictions, farmers are facing financial
burdens and difficult decisions ahead of the 2026 growing season.
Prices spike
Fuel and fertilizer are huge input costs for agriculturists. As exports suffer, heightened prices and tightened supplies are creating financial challenges for operations worldwide.
Fertilizers are the single biggest expenditure for many farmers each year, accounting for up to 25 percent of agricultural commodity production costs, according to Werz.
Market analysts say nitrogen has been the most heavily impacted fertilizer so far, with a March 23 Farmdoc Daily article reporting urea prices rose by more than 28 percent within three weeks.
Field crops like corn and cereal grains like wheat, barley and oats rely heavily on nitrogen-based fertilizers, which are applied ahead of the summer growing season.
While some producers locked in prices last fall before the conflict broke out, others are facing hard planting decisions in the face of current soaring prices.
“With the disruption unfolding just ahead of the spring planting season, a prolonged closure would likely be felt through higher input costs, tighter availability in selected fertilizers and additional pressure on farm margins in 2026,” reads a March 23 Farmdoc Daily article titled “Strait of Hormuz Closure and Fertilizer Supply Risks for U.S. Agriculture.”
“The mid-run outlook will depend heavily on the duration of the disruption, with the effects likely to be most severe in regions at the end of supply chains,” the article continues. “Short interruption would likely produce a temporary price spike, while a more prolonged closure could lead to broader fertilizer market tightening as trade flows adjust and inventories are drawn down.”
Farmdoc Daily analysts predict higher fertilizer prices are likely to continue into the fall, potentially resulting in even larger impacts on production costs and returns in 2027.
Policy pressures
While the war has undeniably impacted volatility, several farmers and farm groups argue high fertilizer prices are not a new issue and are pressing for reform and transparency on a national level.
In a March 27 Ag Web article, Reporter Tyne Morgan outlines some ongoing efforts and mounting policy pressures regarding fertilizer prices.
She notes the U.S. Department of Agriculture (USDA) and the U.S. Department of Justice signed a memorandum of understanding in September 2025 committing both agencies to jointly examine high and volatile input costs – including fertilizer – by scrutinizing competitive conditions in agricultural markets and enforcing antitrust laws around price setting and market concentration.
Additionally, recently-introduced federal legislation is seeking to address concerns by increasing transparency.
On March 26, U.S. Reps. Brad Finstad (R-MN) and Dusty Johnson (R-SD) introduced the Fertilizer Transparency Act of 2026, and U.S. Sens. John Thune (R-SD) and Amy Klobuchar (D-MN) introduced companion legislation in the Senate.
The bill would require the USDA to collect and publish data on fertilizer prices from manufacturers on a weekly basis, rather than conducting an annual voluntary survey on input prices with the goal of providing American producers with more accurate information on fertilizer prices.
Minnesota Farm Bureau Federation President Dan Glessing expressed his support for the legislation, emphasizing price volatility creates challenges and greater transparency will help promote competition and ensure a more level playing field when managing input costs.
“Fertilizer is one of the largest input costs farmers face and recent price volatility has made it even harder to plan ahead,” Glessing says. “Improving transparency in the fertilizer market through reasonable reporting requirements will give farmers better insight into supply, pricing and market trends so they can make informed decisions for their operations.”
Grace Skavdahl is the editor of the Wyoming Livestock Roundup. Send comments on this article to roundup@wylr.net.
