The ongoing US-Israeli conflict with Iran has resulted in the closure of the Strait of Hormuz, causing significant disruptions in global shipping and sparking a new energy and fertilizer crisis in 2026. This strait serves as a crucial passage for fossil fuels, such as methane gas, essential in producing urea, a widely used synthetic nitrogen fertilizer in the US. The manufacturing of nitrogen (N) fertilizers is heavily linked to fossil fuels, and any changes in energy availability and cost directly affect fertilizer prices.
Key fertilizers containing nitrogen and phosphorus (P), like urea, ammonia, and phosphates, produced in the Middle East, also transit through the Strait of Hormuz. The strait’s closure has severely disrupted the global fertilizer market, creating supply bottlenecks as demand surpasses supply.
The United States is not insulated from this double fertilizer and energy crisis
Although the US primarily produces its nitrogen and phosphorus fertilizers domestically, it still imports essential fertilizers like potash (K) and some fossil fuels required for domestic production. USDA data reveals that in the first quarter of 2026, the US imported over 3.5 million metric tons of fertilizer, including raw materials. In 2025, the annual fertilizer export was about 25 million metric tons.
By March 13, the market price of urea had surged to $594 per metric ton, a 26 percent increase from the $469 per metric ton recorded on February 27. Retail prices for major fertilizer products have also seen a rise. With ongoing war and restricted imports, fertilizer prices are expected to continue climbing.
Global crises show how brittle agricultural supply chains are
Spikes in fertilizer costs due to global crises are not new. The COVID-19 pandemic caused significant disruptions in the agricultural supply chain. In 2022, fertilizer prices hit historic highs, with anhydrous ammonia reaching $1,600 per metric ton and urea exceeding $1,000 per metric ton. During that year, I wrote about how Russia’s invasion of Ukraine triggered a global energy and fertilizer crisis, impacting farmers worldwide.
Adding to these crises since 2020 is the issue of a highly consolidated fertilizer industry. Four companies control more than 75 percent of the nitrogen fertilizer market, greatly influencing prices. The Department of Justice has initiated an antitrust investigation to determine if major fertilizer manufacturers colluded to limit supply and inflate prices. The lack of competition in the US food and farming system adds pressure on farmers through higher input costs, reduced bargaining power, and tighter profit margins.
So how will the war affect farmers?
Farmers face significant challenges whenever geopolitical crises disrupt food and farming supply chains. In 2024, USDA data indicated that farmers spent $33.8 billion on fertilizers, accounting for about 7 percent of total farm expenditures. In 2022, amidst higher fertilizer prices, farmers spent $36.6 billion, representing about 8 percent of total expenditures.
For 2026, pre-war USDA forecasts estimated fertilizer costs for farmers at $35.8 billion, which could rise if prices remain high. In 2023, the US consumed 2.9 million metric tons of urea and 3.2 million metric tons of urea ammonium nitrate (UAN), mostly for corn. According to International Fertilizer Association data, ammonia, urea, and UAN make up 25 to 27 percent of applied nitrogen fertilizer, and any price hike affects farmers significantly.
Nitrogen Fertilizer Consumption in the United States
| Product | Consumption (in thousand metric tons) | Percentage of total nitrogen fertilizer use |
| Ammonia | 2750.2 | 23.7 |
| Ammonium Nitrate | 215.2 | 1.9 |
| Ammonium Phosphate | 639 | 5.5 |
| Ammonium Sulphate | 345.7 | 3.0 |
| Urea | 2943.8 | 25.3 |
| Urea Ammonium Nitrate (UAN) | 3220 | 27.7 |
| NK | 188.2 | 1.6 |
| NP | 393.8 | 3.4 |
| NPK | 504.2 | 4.3 |
| Other | 420 | 3.6 |
| Grand Total Nitrogen as Nutrient | 11620.1 | 100 |
Source: IFA 2025
Using urea as a case study shows how increased fertilizer costs impact farmers.
Of the $35.8 billion projected for fertilizer expenditure this year, 60 percent is nitrogen, totaling $21.5 billion. About 25 percent of this is urea, meaning farmers will spend an estimated $5.4 billion on urea alone.
If urea prices remain at $594 per metric ton, farmers will need to spend $6.7 billion on urea alone, pushing total fertilizer expenses close to $37 billion. This simple calculation illustrates the financial impact of rising prices on farmers. However, the reality of fertilizer pricing and consumption is more complex. Many farming inputs, including other fertilizers like phosphates and energy sources such as diesel, gasoline, and methane gas, are also increasing in cost. Farmers are preparing for spring fertilizer applications, with crops like corn and spring wheat requiring the most nitrogen fertilizer now.
Corn farmers will take a hard hit if fertilizer prices keep increasing
Corn production relies heavily on nitrogen fertilizer, accounting for over one-third of operating costs. Rising nitrogen fertilizer and fuel costs will likely increase corn production costs, reducing farm profits.
In discussions with corn and soybean farmers in Illinois, they expressed concerns about the high price and limited availability of nitrogen fertilizer for upcoming field applications in spring. Having purchased fertilizer before the war, they now face inadequate supply to meet their prepaid orders. They worry that continued conflict and the closure of the Strait of Hormuz may delay fertilizer deliveries, hindering spring applications.
Typically, when fertilizer prices rise, some farmers switch to alternative nitrogen sources or reduce application rates. Reports suggest some might shift acreage from nitrogen-intensive corn to soybeans, which require less nitrogen fertilizer. However, soybeans demand phosphate, and diammonium phosphate prices are also rising. Furthermore, soybean farmers face market and financial challenges due to trade wars, so switching crops may not shield them from market volatility and risks.
Industrial agriculture has other impacts felt far and wide
Global food supply chains are interconnected. The Strait of Hormuz facilitates nearly one-third of the global fertilizer trade. A crisis affecting US farmers has global repercussions, particularly in countries relying on imported fertilizers and fuel. The US also imports food from countries facing similar crises and experiencing rising fertilizer and energy prices. The outcome is clear: increased input costs will result in higher food prices for consumers.
US agriculture’s heavy reliance on fertilizers contributes to emissions of heat-trapping gases, significantly impacting global climate change. Fertilizer use in the US alone accounts for 120 million metric tons of carbon dioxide emissions, as noted in a recent report by the Union of Concerned Scientists.
Although predicting fertilizer prices and consumption is complex, it is evident that President Trump’s war on Iran and the Strait of Hormuz closure will cost US farmers billions this year. This highlights the need for farmers to move away from the current system focused on commodity crops for animal feed to one that produces food without excessive dependence on synthetic fertilizers and chemicals.
My colleague Dr. Kate Anderson has offered insights into how farmers can escape the cycle of reliance on fertilizers. We need practical solutions that enable farmers to succeed and profit while establishing resilient farming systems, not one that pushes them into a new crisis with every disruption in global supply chains.
