NASHVILLE, Tenn. (RFD NEWS) — Fertilizer prices jumped sharply following U.S. military strikes involving Iran, raising immediate cost concerns for farmers as global nutrient markets reacted to heightened geopolitical risk, according to StoneX fertilizer analyst Josh Linville.
Trade activity accelerated early in the week, led by New Orleans urea markets. Linville reported physical urea prices surged roughly $70 per ton, with full March trades previously near $468 and April at $457 before second-half March values climbed to about $550. The rapid move signals traders pricing in potential supply disruptions tied to Middle East instability.
Operationally, the nitrogen and phosphate markets are highly sensitive to regional conditions because key exporters rely on shipping lanes near the Strait of Hormuz. Any disruption threatens fertilizer flows during peak spring demand, when U.S. growers are securing nutrients ahead of planting. Market participants expect UAN, anhydrous ammonia, and phosphate values to follow urea higher if tensions persist.
For producers, rising fertilizer costs directly affect planting budgets and operating loans, forcing difficult decisions on purchase timing and application rates. The price spike comes at a challenging moment as fertilizer affordability relative to crop prices was already historically weak entering the season.
Looking ahead, markets will watch geopolitical developments closely, with volatility likely to remain elevated as traders assess supply risks and shipping security.
Crude oil has jumped amid the closure of the Strait of Hormuz, one of the world’s most critical choke points for energy. Analysts like Naomi Bloom with Total Farm Marketing will be closely watching military action as spring planting begins.
“So that would be the one caveat to be watching for,” Bloom explained. “If crude oil prices work higher, we’ll see short covering from the funds that are still short some of these grain markets. So, when they cover their shorts, that means they’re buying them back, and that could potentially lead to new technical buying as well, so definitely be mindful of that. Obviously, we don’t want a war, and we want to not market our crop based on war, so be realistic about the fundamentals at hand. But to your point, you should be mindful of what’s happening in the Middle East.”
Bloom suggests that farmers stay focused on fundamentals, even as energy prices and shipping risks remain uncertain. With ships at a standstill in the strait, fertilizer prices are bound to come under pressure.
Prices for urea, UAN, and anhydrous ammonia are already near-historic highs relative to corn prices. DAP fertilizer is also among the most expensive on record for this time of year. Farmers are weighing up when to buy, how much to apply, and how to manage operating loans, and the potential disruption of supply could push costs even higher.
Economist Arlan Suderman with Stone-X says the region plays a much bigger role in fertilizer supply than you may realize.
“Most people don’t realize that, when you look at fertilizer -- particularly urea fertilizer, one of the popular nitrogen fertilizers that’s essential for growing food production around the world -- about half of that is produced in the Middle East/North Africa region. And if you look specifically, about a third of the world’s portable urea fertilizer goes through the Strait of Hormuz on a regular basis, about 20 to 25% of it in adverse ammonia, another form of nitrogen fertilizer. It goes through that passage. Most of the phosphate that we import into the United States for growing crops goes through the Strait of Hormuz, so it has a significant impact.”
Suderman says China has also restricted some phosphate exports, adding to tighter global supplies.
“We immediately saw a $70 to $80 increase in the price of urea fertilizer at the ports at New Orleans,” Suderman continued. “That all makes its way up to higher prices in the Midwest, and where we grow most of our crops, as we get ready to top dress our wheat crop or winter wheat fertilizer, get ready to put down fertilizer for our corn crop that we’re going to be planting here starting in another month or so.”
The Middle East accounts for about 40 to 50 percent of the international fertilizer trade. Right now, maritime analysts say traffic is down at least 80 percent.
However, farmers are feeling the pinch from rising input prices beyond fertilizer. USDA reports commodity prices fell nearly four percent in January and are down 10 percent from a year ago.
Soybeans, milk, lettuce, and eggs dropped, while cattle, broilers, and apples saw small gains. At the same time, costs for feeder cattle, pigs, taxes, and services rose, offsetting relief from lower diesel prices and interest rates. The gap between prices received and prices paid dropped to 74, showing farmers’ purchasing power is declining.
As markets watch energy prices and global developments, trade policy is also front and center for U.S. growers. With a large crop to market and strong competition from South America, timing and export demand will matter.Dr. Mark Welch with Texas A&M Agrilife Extension says any return to more stable trading relationships could make a difference.
“Re-establishing some of our basic trading agreements and arrangements and partnerships, that, to see China’s a huge buyer of our soybeans, and has been for a long, long time,” Welch said. “We typically export half of our soybeans, and half of those go to China. And so, then, to have the prospects of something again approaching something normal over the last several years, an opportunity maybe coming back into the market, for now, for the ’25-'26 crop that we’re marketing.”
Welch says there are at least some reasons for more optimism.
“So, it’s certainly nice to see some optimism there on perhaps some soybean export sales to China, perhaps more normalized trading relations with India, with soybean oil exports, some of the soybean co-products or byproducts, including the oil and the meal,” Welch continued. “What might trade possibilities for those products be? And then, of course, if there’s some legislation that perhaps is moving through that will be more friendly for renewable fuels.”
Welch says a clearer trade policy and steady demand could help provide some much-needed certainty as farmers market this year’s crop. The grain trade is preparing for one of the most important reports of the season. USDA’s prospective plantings survey is set for release on March 31.
The report, based on farmer surveys conducted this month, will provide the first government estimate of how many acres will be planted in corn, soybeans, and wheat. And small shifts in those numbers can spark market volatility.
Brian Hoops with Midwest Market Solutions told RFD NEWS, while early outlooks are already available, the final survey results could adjust those projections. “
One of the first looks from the government that will have for planet acres — we have the outlook from a couple of weeks ago — USDA is likely to stay pretty close to those numbers, but they can change things based on farmer surveys here, during the month of March,” Hoops explained. “So, the USDA probably has that calculated already. They’re supposed to have it by the 1st of March. We’ll get our first look at it. And we do expect to see less corn, and more soybeans than a year ago […] and how many more acres we get of soybeans, how much fewer corn acres we get.”
Hoops adds that the recent crop insurance prices were also set on Friday, and they were down slightly in corn, but soybeans jumped quite a bit, which he says is a much better guarantee than they were a year ago.
