Matt Ubel, standing on his farm near Wheaton, Kansas, motions to the fertilizer spreader he’ll use to spread urea fertilizer this spring.
Frank Morris
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Frank Morris
As spring planting begins across the northern hemisphere, nitrogen fertilizer is crucial before seeds are sown. “We’re right in the middle of it,” said farmer Matt Ubel from his large green fertilizer spreader near Wheaton, Kansas. “Spring sees a lot of nitrogen application.”
The steep costs of fertilizer and farming essentials have financially strained many row crop farmers. Some waited for a price drop this spring, only to see urea prices soar by nearly 30% when Iran blocked the Strait of Hormuz, disrupting almost half of the global fertilizer trade. “This has certainly caught some off guard,” Ubel mentioned.
The Persian Gulf: A Global Hub for Nitrogen Fertilizer
Farmers worldwide, including those in rural Kansas, are grappling with the unexpected impacts of the Persian Gulf conflict as the closure of the Strait of Hormuz has hindered nearly 50% of global urea exports.
Nitrogen is essential for plant growth, with natural gas being the best source. The Gulf states boast the world’s largest gas reserves.
“If asked to describe a nightmare scenario for fertilizer, it would be this exact event at this exact time,” stated Josh Linville, head of the global fertilizer department at brokerage firm StoneX. Linville noted that urea expected to arrive in the U.S. during the peak planting season next month will not be available.
The Fertilizer Institute forecasts a shortfall of approximately 2,000,000 tons of urea for U.S. farmers this spring.
The U.S., as the leading natural gas producer, has a strong domestic fertilizer industry but still imports about 18% of its nitrogen fertilizer, especially to meet spring demands. Other countries rely more heavily on petrochemical imports, with liquefied natural gas from the Persian Gulf fueling urea production in top-producing countries.
“Countries like India, the second largest urea producer, are seeing declines in production. Pakistan and China are also struggling with gas supply issues,” Linville explained. “These nations are now having to adjust, allocating limited resources to other industries.”
Natural gas isn’t the only issue. About half of the world’s sulfur exports are also affected by the Strait of Hormuz closure. Sulfur is vital for plant nutrition and is a key component in phosphate fertilizer.
“We produce a lot of phosphate fertilizers in the U.S., but without sulfur, production halts,” said Veronica Nigh, chief economist at the Fertilizer Institute. “It’s a double-edged sword.”
No Easy Solutions
Federal lawmakers are seeking solutions. Bipartisan Senate legislation aims to reduce fertilizer costs by ensuring transparent pricing. Additionally, the Trump Administration is removing barriers to fertilizer imports from Venezuela and Morocco.
“They’re exploring various strategies,” noted Nigh, acknowledging the complexity of the issue.
The fertilizer supply chain has little flexibility. The product is difficult to store and can become dangerous or unusable with slight moisture. Nigh mentioned that fertilizer plants run at full capacity and take years to build. Iran was a leading urea producer before the conflict, but the future of its production capacity is uncertain.
The natural gas reserves in Iran and Qatar are among the world’s largest, supplying fertilizer production in India, usually the second-largest nitrogen fertilizer producer. However, these fields have suffered severe damage in the conflict.
Even after the Strait of Hormuz reopens, restoring the fertilizer supply chain will take months. “Returning to normalcy will take time,” Nigh stated.
In the meantime, American farmers may face tough decisions during planting. Corn requires significant nitrogen, unlike soybeans. This may lead to more soybean cultivation. Some farmers might even skip planting altogether due to fertilizer shortages.
“In Texas, crops like watermelons and cantaloupes might not be planted,” Nigh explained, “and the same goes for pumpkins in Indiana.”
While reduced fertilizer use could benefit the environment by decreasing water pollution and algae blooms, the fertilizer crisis following the attack on Iran will likely lead to reduced food availability globally. Vulnerable countries, especially those reliant on Persian Gulf oil for fertilizer, could be severely affected.
“Our product is essential for food production,” Nigh concluded. “The consequences might not be immediate, but they could be significant.”
