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Mar. 11, 2026
By Dr. Faith Parum, Economist, American Farm Bureau Federation Key Takeaways With spring planting beginning around the U.S., it is critical to secure transit, along with the necessary risk‑coverage insurance, for vessels carrying fertilizers through the Strait of Hormuz. If farmers are unable to obtain the remaining supplies in time, we could see reductions or shifts in planted acreage and lower yields, which affects our nation's food security and the affordability of essential goods. Middle East tensions are adding uncertainty to fertilizer markets at the start of the U.S. planting season. Farmers are attempting to make or finalize fertilizer purchases just as global energy and fertilizer markets react to instability in a major fertilizer-producing region. Nitrogen fertilizer supply chains are closely tied to the Persian Gulf. Countries exposed to disruptions in the region account for nearly 49% of global urea exports and about 30% of global ammonia exports. At a time when margins are already tight and input costs record high, global conflicts that disrupt fertilizer supplies or raise fuel prices could increase production costs for U.S. farmers. Fertilizer and fuel prices are largely determined in global markets, meaning U.S. farmers can experience higher input costs even when the Middle East is not the primary direct supplier of specific fertilizer products to the United States. American farmers are entering the 2026 spring planting season amid geopolitical tensions involving Iran and nearby Persian Gulf countries, which adds uncertainty to global energy and fertilizer markets. This timing matters because fertilizer purchasing, field preparation and early season fertilizer applications are already underway, limiting farmers' ability to adjust if input prices spike suddenly. Anecdotally, farmers are already considering reducing corn acres planted in exchange for crops like soybeans that are less exposed to fertilizer price volatility. At the same time, many farmers are already facing significant cost pressures as production expenses remain elevated, reducing working capital that would normally help absorb unexpected shocks. In this environment, disruptions in global energy markets can quickly translate into higher input costs for farmers. One reason these geopolitical developments matter for agriculture is the region's role in global energy and fertilizer markets, particularly through the Strait of Hormuz. The Strait of Hormuz is central to energy and fertilizer trade. Oil flowing through the Strait averaged about 20 million barrels per day in 2024, roughly 20% of global petroleum liquids consumption. Because energy is a major input to fertilizer production and transportation, disruptions or heightened risk in the region can amplify volatility across agricultural input markets. To read entire report, Click Here. Tweet |
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