800 326 9054Even if the latest U.S. ceasefire with Iran holds and the Strait of Hormuz reopens in short order, damage to fertilizer infrastructure in the region will keep prices elevated through 2027 and into 2028, a new analysis finds, as U.S. agriculture braces for long-term supply challenges.
Forthcoming analysis from North Dakota State University, set for publication Wednesday and seen by Agri-Pulse, models fertilizer prices across three potential scenarios.
One considers a “quick reopening” where the Strait of Hormuz fully opens following the ceasefire agreement; another weighs a “contested transit” scenario where vessel traffic remains restricted, but a second lane opens in July; the third models an “extended conflict” scenario where the strait remains mostly blocked through the end of the year.
Under all scenarios, prices remain elevated through 2027 and into 2028.
Reports suggest extensive damage to Iran’s South Pars petrochemical complex and the Ras Laffan liquefied natural gas infrastructure that serves Qatari fertilizer makers, taking urea production offline.
“[I]f this damage assessment is accurate, the pre‐crisis pricing environment is unlikely to return before 2028,” the authors note.
Before the conflict broke out, urea prices were around $470 per short ton. The NDSU economists project a new price floor of $532 a ton.
Under all scenarios, the price impacts are likely to worsen before they improve, the analysis says. Even a swift reopening scenario would see urea prices reach $782. A partial reopening would send urea prices to $784 per ton by July and diammonium phosphate to $828 by September – a 33% rise on pre-conflict levels.
An extended conflict, however, could send prices up to $996 per short ton for urea, the authors estimate, and $892 for DAP.
Growers are already bracing for longer-term challenges. A survey of 1,600 corn growers published last week found almost 60% are more concerned about 2027 fertilizer prices and availability than 2026.
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“I’m more worried about next year,” former U.S. Ambassador to the United Nations Food and Agriculture Agencies Kip Tom said during an event hosted by NOTUS on Tuesday. Tom is now vice chair of rural policy at the America First Policy Institute, the Trump-aligned think tank cofounded by Agriculture Secretary Brooke Rollins.
Repairing some of the fertilizer infrastructure in the Middle East could take up to five years, Tom said. Further constraining availability, he said, are Ukrainian attacks on Russian fertilizer infrastructure.
“It’s going to hurt,” he said.
Although Tom said, overall, he is “glad” that the U.S. mounted its strikes on Iran, arguing that the war effort and attempts to prevent Iran from securing nuclear capabilities are “paying it forward for future generations.”
“We’re dealing with the consequences of that right now,” he said, but added that there “are solutions out there.”
The consequences are not being felt evenly, however. Southern producers in the U.S. were far more exposed heading into the crisis and are bearing the initial brunt of higher prices, according to new analysis from the American Farm Bureau Federation published Tuesday.
Just 19% of growers in the South had prebooked fertilizer before planting season, compared to 30% in the Northeast, 31% in the West, and 67% in the Midwest that locked in lower prices before the start of the conflict.
Commodities in the South, like cotton and rice, are in deeper price slumps, AFBF Economist Faith Parum told reporters during a call Tuesday. “Lower prices make them less likely to pre-book.”
“They also plant a variety of crops in the South, so sometimes they are making that decision right before planting, and don’t have the time to plan ahead, like some of the corn soybean rotations and other parts of the country,” she added.
This disparity is also reflected in the share of farmers reporting that they can’t afford purchases to cover all of their fertilizer needs. Some 70% of respondents across the U.S. said they couldn’t afford their fertilizer, but that figure is close to 80% in the South, Parum said.
“We did not pre-book our fertilizer because we could not make ends meet last year, frankly,” Lorenda Overman, who runs Overman farms in Goldboro, North Carolina, said during Tuesday’s AFBF press call. “We’re going to cut back on our acres of corn and try to plant a crop that’s a little less fertilizer and nitrogen dependent – which would be soybeans. We’re also going to spread that fertilizer a little bit thinner.”
Steve Davies contributed to this report.
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*Sourced from Agri-Pulse.