Fertilizer Prices Surge 40% as Iran War Chokes Critical Supply Route

A widening conflict in the Middle East has triggered a sharp spike in global fertilizer prices, threatening to squeeze American farmers just as they prepare for spring planting season.

The partial closure of the Strait of Hormuz—a narrow waterway between Iran and the Arabian Peninsula—has brought shipments of critical crop nutrients to a near halt, with benchmark nitrogen fertilizer prices surging 30 to 40 percent in the past week alone.

Iran’s military threats against Western vessels have effectively frozen shipping through the strait, which handles roughly one-third of global trade in urea, nitrogen, sulphur, and phosphates. The disruption comes at a precarious moment for North American agriculture.

“The entire world is competing for the limited supply that’s available, and we’re preparing to go to the fields and plan for next year’s crops in the next 30 to 60 days in most of North America, so the timing is pretty detrimental,” said Kreg Ruhl, vice-president of crop nutrients for Growmark.

The Middle East accounts for 50 percent of global sulphur exports and 34 percent of urea shipments, with production already disrupted in Qatar and Iran. Analysts warn that if the blockage persists for four to six weeks, key spring fertilizer shipments to North America could be missed entirely.

“If fertilizer prices continue to go up and commodity prices continue to stay where they’re at, then that really takes away our profitability.”

— Christine McKee, Alberta farmer

The impact extends beyond nitrogen-based fertilizers. Natural gas, essential for ammonia production, and oil, a source of sulphur byproducts, face parallel disruptions—creating a domino effect across all fertilizer commodities. Urea prices have climbed approximately $70 per ton, with nitrogen fertilizer at New Orleans port already reflecting the surge.

The crisis compounds existing pressures on the agricultural sector. Global fertilizer supplies were already tight heading into this crop year, keeping prices elevated even before the conflict erupted.

“Even before what is happening in Iran, supplies of a lot of fertilizer were relatively tight already heading into this crop year which has kept a lot of fertilizer prices elevated,” said Leigh Anderson, a senior economist at Farm Credit Canada.

The situation is further complicated by China—the world’s third-largest urea exporter—restricting exports until August, removing a potential backstop for global supply. Some farmers may shift from corn to soybeans if nitrogen availability remains constrained.

While potash and phosphate supplies remain unaffected so far, industry observers caution that prolonged disruption could ripple through food production chains. The Yara CEO has warned that fertilizer shortages could cut crop yields by up to 50 percent in the first harvest, raising concerns about broader food price inflation in coming months.

For now, American farmers are weighing their options amid uncertainty, with some stockpiling at elevated prices while others gamble on a diplomatic resolution before planting season reaches its peak.