Farmers, Commodities, and Consumers Impacted by the Fertilizer Crisis

Rising fertilizer prices are emerging as one of the most immediate agricultural consequences of the escalating U.S. and Israel war with Iran, creating uncertainty for farmers preparing for the spring planting season. Analysts warn that the conflict’s disruption of global fertilizer supplies could affect crop decisions, farm profitability, and ultimately food prices for consumers.

It is one more political dynamic that farmers will watch as they are already waiting to see if President Donald Trump’s global tariff policies will yield benefits for them.

On Thursday, Rebecca Feng with the Wall Street Journal wrote this about the future of oil prices:

“When the U.S. and Israel first attacked Iran, some traders initially expected days of disorder. Now they are expecting the turmoil to last weeks or even months.”

Feng went on to write about how high prices could go in the coming days if the Strait of Hormuz remains stressed for oil tankers’ passage.

“Macquarie Group is now predicting that crude prices could top $150 if the Strait remains closed for a few weeks. Others say oil prices could go even higher.”

One reason for the changing outlook is a surge in attacks on tankers near the Strait of Hormuz. Since Wednesday, at least seven vessels have been hit in waters off the coast of Dubai and Iraq.  

Farmers See Rising Fertilizer Prices Due to U.S. War with Iran

The Strait of Hormuz is one of the world’s most important trade routes for both energy and agricultural inputs.

Sasha Rogelberg with Fortune explained why this is such a dilemma for farmers:

“About one-third of global seaborne fertilizer passes through the Strait of Hormuz, where Persian Gulf nations export nearly half of the world’s urea and 30% of its ammonia—key plant nutrients. Threats to that shipping route have pushed prices up roughly 30% between late February and early March, according to the Fertilizer Institute.”

Seth Meyer, a former chief economist for the U.S. Department of Agriculture, told Fortune, “A bad decision this year could be pretty costly.”

 RELATED: Why one expert says farmland ownership can provide investment stability during economic uncertainty. 

Commodity Impact from War with Iran

Rogelberg goes on to write that the fertilizer situation could also impact what farmers decide to plant this spring.

“’’Certain crops rely on fertilizer more than others, namely corn, which accounts for 95% of the total grain and feed grown in the U.S., per USDA data. The exorbitant prices of fertilizer may force some farmers to pivot some of their acres away from corn and instead grow more crops that rely less on added nutrients, such as soybeans,’” said Meyer, who now serves as director of the University of Missouri’s Food and Agricultural Policy Research Institute.”

Consumers Could Pay Higher Prices Because of U.S. War with Iran

The ripple effects could extend to consumers for a couple of reasons.

According to the Center for Strategic and International Studies (CSIS), when fertilizer costs rise, farmers often respond by reducing application rates or switching crops. While these strategies help control expenses, they can also reduce yields or limit production in certain regions. Experts warn that widespread reductions in fertilizer use could eventually tighten grain supplies, pushing food prices higher for consumers.

Fox Business reporter Eric Revell wrote why rising oil prices can end up costing consumers more money:

“Higher oil prices, in turn, push gasoline and diesel prices higher, with the average price of a gallon of regular gasoline rising from $2.92 a month ago to $3.54 and diesel increasing from $3.66 to $4.78 in that period, according to AAA data.”

“The increase in oil, gas and diesel prices raises the transportation costs faced by businesses, including grocery stores, which may face pressure to raise the price of food and other items to account for the cost increases if the situation continues.”

RELATED: American Farmland Owner tracked how Russia’s attack on Ukraine shook up the fertilizer market in 2023.