Middle East Conflict Creates Fertilizer Woes
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Reprinted with permission from CoBank’s Knowledge Exchange Division (KED)*. This article is sourced from KED Gleanings, March 9, 2026 issue. (March 10, 2026)
KED’s Takeaway: Global supply dynamics play a role in determining fertilizer costs for American farmers. How long the conflict lasts and impacts shipments through the Strait of Hormuz will be important factors in establishing prices. Product shipped through the Middle East during mid-March is set to arrive in North America for the crucial April window for spring application; product is now at risk of being delayed or not arriving in time. Meridian Agribusiness Advisors reports that at the end of February, 45% of farmers had finished making fertilizer decisions, while another 40% were still making decisions and an estimated 15% have not started making decisions. Those decisions have now become much more expensive. – Jacqui Fatka, lead economist, farm supply and biofuels, CoBank.
Fertilizer prices spiked following the Iran invasion, with the greatest impact likely to hit global nitrogen and phosphate markets. The Strait of Hormuz is one of the most important shipping channels in the world with three of the largest 10 urea exporters, three of the 10 largest NH3 exporters and one of the five largest DAP/MAP exporters utilizing the Strait.
“While domestic fertilizer producers have been producing flat out and importers have been aggressively importing product in preparation for spring plant, there is still product that is enroute to the U.S. and other major fertilizer consumers,” Corey Rosenbusch, president and CEO of The Fertilizer Institute, said in a social media post.
President Trump’s offer to provide cargo insurance and naval protection to ships sailing through the Strait offered some hope, and urea prices softened. But vessel movement has not increased. “If this continues, it is impossible to know how bad it gets,” said Josh Linville, StoneX vice president of fertilizer. “It will essentially turn into a market where the highest bidder gets the tons.”
Nearly 50% of the world’s urea exports originate from the Middle East, with Iran alone contributing 11% to the global supply as the second largest urea exporter. Just days after the attack, some Midwest inland terminals saw urea prices jump to $650-$675 per short ton FOB — an increase of $135-$145 per short ton compared to the week prior —although many suppliers withdrew offers due to the uncertainty around securing supplies. Europe is also dealing with high natural gas prices, running urea production at an estimated 75% of normal, which removes 3.5 million tons of urea production per year, Linville said.
Natural gas is an important feedstock and primary cost driver to produce ammonia – “the building block for all nitrogen fertilizers,” explained Rosenbusch. An estimated 20% of the world’s liquid natural gas makes its way through the Strait with significant increases seen in natural gas prices in recent days. While the U.S. does not typically import ammonia directly from this region, its removal from the global market puts pressure on total supply, elevating prices, TFI said in a statement.
Qatar is a major nitrogen exporter, and Saudi Arabia is a major exporter of both nitrogen and phosphate fertilizers. The Strait’s closure cuts off their exports. Saudi Arabia is a top four global exporter of phosphates and the leading supplier of U.S. phosphates imports. With China’s phosphate export ban in place until at least August, this leaves only Russia and Morocco as likely suppliers to the U.S. market.
Meanwhile, the U.S. International Trade Commission initiated a mandatory five-year “sunset” review of countervailing duties on phosphate fertilizer imports from Morocco and Russia. The review will determine whether removing the duties would likely lead to continued injury to the domestic fertilizer industry. In addition to this stress on the industry, the U.S. Department of Justice officially launched an antitrust investigation into fertilizer producers Nutrien, Mosaic, CF Industries, Koch Industries and Yara International last week.
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To learn more from CoBank’s Knowledge Exchange Division, visit www.cobank.com/knowledge-exchange. To be added to their weekly newsletter distribution list, email Jacqui Fatka, lead economist, farm supply and biofuels, at jfatka@cobank.com, or subscribe to all KED research reports by clicking here.
You also can stay tuned for more from Jacqui Fatka as she will join the esteemed list of speakers at the 2026 Women in Agribusiness Summit in New Orleans, September 22-24.
* Contributors to CoBank’s Knowledge Exchange Division (KED) weekly Gleanings newsletter include Rob Fox, VP; Tanner Ehmke, lead economist, grains and oilseeds; Jacqui Fatka, lead economist, farm supply and biofuels; and Emmie Noyes, industry analyst.
