Urea up by a third in a week: The Hormuz fallout on fertilizer and planting

Brad Feckers had planned to put two-thirds of his farm in Shell Rock, Iowa into corn this season. He had locked in some fertilizer purchases early. Then, in early March, U.S. and Israeli strikes on Iran sent shockwaves through the Strait of Hormuz, and tanker traffic ground to a near halt. Nitrogen prices began climbing fast. "If nitrogen doesn't come down, we might switch more acres to beans," he told Bloomberg.

 

Feckers is not alone. From the U.S. Corn Belt to Brazil's cerrado, from India's kharif preparations to Australia's winter crop window, growers across the world's major agricultural regions are confronting the same question: will fertilizer arrive in time?

 

The answer is growing less reassuring by the day.

 

The strait that feeds the world's farms

 

The Strait of Hormuz has dominated energy headlines for weeks, but the disruption to fertilizer trade is equally severe. According to the Associated Press, multiple attacks have occurred near the strait, including a drone-laden explosive boat that struck a Marshall Islands-flagged oil tanker in the Gulf of Oman, killing one crew member. The UK Maritime Trade Operations Centre warned of elevated electronic interference in the area, and data analytics firm Kpler reported a sharp drop in tanker traffic.

 

The strait handles roughly 20 million barrels of oil per day — about a fifth of global consumption. But for agriculture, the real vulnerability lies in fertilizer flows. In an open letter published on March 18, the International Fertilizer Association (IFA) laid out the exposure: in 2024, Iran, Qatar, Saudi Arabia, the UAE and Bahrain together accounted for 34% of global urea trade, 23% of ammonia trade, and 18% of ammoniated phosphate trade. Nearly 18.5 million tonnes of urea were exported via the strait. The wider Middle East supplied close to 30% of global exports of major fertilizers.

 

An analysis by Dr. Faith Parum, economist at the American Farm Bureau Federation (AFBF), puts the concentration in even starker terms: countries exposed to disruption in the Hormuz region account for nearly 49% of global urea exports and about 30% of ammonia exports. The vulnerability extends well beyond Iran's own production capacity — urea, ammonia, phosphates, sulfur and petroleum products from Gulf states all transit this corridor. Nearly half of global sulfur trade passes through the strait, and sulfur is a critical raw material for phosphate fertilizer production.

 

Writing for Forbes, energy columnist Robert Rapier highlighted a critical asymmetry: the United States maintains a Strategic Petroleum Reserve with hundreds of millions of barrels of crude, but there is no equivalent strategic buffer for nitrogen fertilizer. The fertilizer trade operates on a just-in-time basis, with inventories calibrated to seasonal planting cycles rather than geopolitical shocks.

 

 

Prices spike: urea up by a third in a week

 

Markets reacted swiftly. According to Reuters, fertilizer prices at the New Orleans import hub jumped from $516 per metric ton before the conflict to as high as $683 — a rise of more than 30% in a single week. StoneX fertilizer analyst Josh Linville described the potential impact on global nitrogen and phosphate markets as "devastating," noting that prices were already near historic highs for this time of year before the conflict escalated.

 

The outlook for Brazil is particularly acute. Fabio Sgarbi, founder and CEO of StrategicAg Consulting, noted that Brazil imports approximately 85% of its fertilizer needs and nearly all of its nitrogen inputs. In a prolonged crisis, urea prices could climb back to the $600–700 per tonne range, compared to recent levels near $470. By his estimate, this would increase production costs by $40 to $80 per hectare, depending on management practices.

 

Phosphate markets are also under pressure. According to Argus Media, Morocco's OCP reported sales of MAP to Latin America (excluding Brazil) at $810–820/t CFR and TSP at $645–650/t CFR for April shipment, while MAP destined for Brazil was priced at $800–805/t CFR. Saudi Arabia's Maaden sold 15,000 tonnes of MAP to South America at $815–820/t CFR for March shipment. A key question remains unanswered: Maaden's phosphate exports leave from Ras Al-Khair, which requires transit through the Strait of Hormuz — now effectively blocked by Iran. The company offered no comment on how the cargo would be routed.

 

Planting plans in flux: corn retreats, soybeans advance

 

The immediate consequence of the fertilizer price shock is a recalibration of planting decisions — most visibly in the United States.

 

Corn is the most nitrogen-intensive major crop, requiring 100 to 150 kilograms of nitrogen per hectare and highly sensitive to the timing of early-season application. Soybeans, by contrast, fix atmospheric nitrogen through symbiotic root bacteria, requiring far less external input. When urea supply is uncertain, this structural difference becomes a decisive variable in planting economics.

 

Dan Basse, founder of AgResource Company — one of the most closely followed agricultural forecasters — told AgWeb that he has already revised his projections. He lowered his U.S. corn planting estimate by 1 to 1.5 million acres on account of the war and fertilizer dynamics, bringing it from 94.5 million acres down to 93–93.5 million. At the same time, he raised his soybean estimate to 86.5–87 million acres.

 

Chip Nellinger of Blue Reef Agri-Marketing offered a geographic nuance: the core Corn Belt — the 50 to 60 million highest-yielding acres in the "I-states" — is unlikely to shift significantly. But on the margins, the economics will tilt clearly toward soybeans. Seth Meyer, former USDA chief economist and now at the Food and Agricultural Policy Research Institute, agreed: farmers may cut corn acreage or sharply reduce application rates — either way, yields will suffer.

 

This recalculation is not confined to the United States. Globally, all crops heavily dependent on nitrogen — corn, rice, cotton — face similar pressure. South Asia's kharif preparations begin in May; Australia's winter crop fertilization window opens in June. These are biologically determined timelines that will not wait for geopolitics to resolve.

 

Supply-side responses: localization and biological alternatives

 

The crisis is also prompting action on the supply side.

 

In mid-March, Israel-based ICL Group announced the opening of a new water-soluble fertilizer production facility in Maharashtra, India. Spanning approximately seven acres, the plant replicates ICL's advanced production model currently operating in Israel. Nir Ilani, President of ICL's Growing Solutions Division, was direct: with geopolitical tensions disrupting global trade routes and delaying fertilizer shipments through the Strait of Hormuz, building local production capacity is essential. The facility will strengthen India's supply resilience and ensure farmers have consistent access to high-quality products. ICL has operated in India for over three decades, generating approximately $250 million in annual revenues.

 

The timing is notable. India is one of the world's largest fertilizer importers, and the facility's launch coincides precisely with the Hormuz disruption, aligning with the Indian government's "Make in India" initiative. Based on historical customs import data and growth trends, India's water-soluble fertilizer market has sustained a high single-digit compound annual growth rate — suggesting substantial room for localized production.

 

Another direction gaining momentum is biological fertilizers. In Brazil, Sgarbi argues that the fertilizer price surge could serve as a catalyst for large-scale adoption of biofertilizers. His logic is straightforward: as mineral fertilizer prices rise, even incremental efficiency gains from biologicals become more economically valuable. Technologies such as nitrogen-fixing bacteria, plant growth-promoting microbes, and nutrient-solubilizing organisms can improve nutrient uptake efficiency and reduce dependence on synthetic inputs.

 

Yet the reality on the ground remains sobering. In Brazil, corn inoculant-treated area has stagnated in recent years at below 10 million hectares, against a total corn area exceeding 22 million hectares. The adoption gap underscores a persistent challenge: when fertilizer is cheap, farmers have little incentive to invest in complementary biological technologies. Only when price shocks are severe enough does the economic calculus shift. Whether this crisis becomes that inflection point remains an open question.

 

The policy vacuum: farmers deciding alone

 

One conspicuous absence in this picture is coordinated policy guidance.

 

The IFA's open letter urged policymakers worldwide to recognize fertilizers as a strategic component of global food systems and to keep key agricultural supply chains functioning. The AFBF's Parum emphasized that securing transit through the Strait of Hormuz — along with the necessary risk-coverage insurance for vessels — is an urgent priority. Yet as of this writing, no coordinated national-level advisory on fertilizer supply risks has materialized in any major producing or consuming country.

 

The implications are clear: farmers are bearing the decision risk alone. The extension systems, policy signals, and market early warnings they typically rely on are collectively silent at the moment they are needed most. A farmer who commits to a nitrogen-intensive crop without certainty of fertilizer supply, only to face shortages at critical growth stages, will suffer losses that are irreversible — in plant development, grain formation, and ultimately, farm income.

 

The structural mismatch: losses already locked in

 

The cruelest dimension of this crisis is not price — it is time.

 

Restoring shipping, rebuilding insurance coverage, moving fertilizer to port — even under the most optimistic scenario, this process takes weeks to months. Insurance systems are inherently cautious; they require sustained periods of stability before restoring coverage, not merely a ceasefire announcement. Agriculture, however, operates on a biological clock: the nitrogen application window for U.S. corn closes by mid-April; South Asia's kharif season launches in May; Australia's winter crop window opens in June. Miss the window, and the yield loss is locked in.

 

This is the core of the problem: two systems operating on fundamentally different timescales. Geopolitical recovery and commercial insurance rebuild over months. Agriculture demands action within days. Even an immediate resolution of hostilities cannot fully prevent disruptions to the 2026 planting season. Fertilizer that arrives late cannot compensate for missed application windows.

 

And these losses will not stay at the farm gate. Bloomberg reported that palm oil futures surged as much as 10% in a single session — the biggest jump since Indonesia halted exports in 2022. Soybean oil futures climbed for an 11th consecutive day, the longest streak of gains since 2008. Wheat neared a two-year high. When energy prices push up the competitiveness of crop-based biofuels, demand for vegetable oils and corn is pulled higher in tandem — the fertilizer crisis and the energy crisis are converging in agricultural commodity markets.

 

Closing

 

Less than four weeks remain before the nitrogen application window for U.S. corn closes. South Asia's kharif preparations are entering countdown. Australia's winter window follows close behind.

 

For farmers across the globe, this is not an abstract debate about geopolitics. It is a concrete, immediate question: will my fertilizer arrive in time? And if it doesn't, what should I plant instead?

 

In a planting season defined by uncertainty, aligning crop choices with input availability may prove to be the most critical risk management decision farmers can make.

 

 

 

Citation:

AgroPages. (2026, March 24). Urea up by a third in a week: The Hormuz fallout on fertilizer and planting [Web article]. https://news.agropages.com/News/NewsDetail---57141.htm