NASHVILLE, TENN. (RFD NEWS) — After a brief reopening, the Strait of Hormuz is once again closed to commercial traffic, raising new questions around global fertilizer supplies as damage in the Middle East continues to be assessed.
Natural gas is a key input in nitrogen fertilizer production. Arlan Suderman with StoneX says damage to gas and production infrastructure could limit output, but the extent and timeline for repairs remain unclear. Suderman says that uncertainty could mean tighter global supplies, depending on how production is prioritized and restored.
“Because natural gas is the primary feedstock for the nitrogen fertilizers that are produced in that area and exported out of that area, the next issue is how much damage to the production facilities, and how long it will take to repair that? How much then is the next, how much damage to the natural gas infrastructure?” Suderman explains. “That could take several years to repair. Once we know that and that provides the feedstock, and with limited production of natural gas, we’re ranking fertilizer as the priority of getting the limited supplies. We don’t think it’ll be at the top of that list. Therefore, you have a reduced supply of natural gas for feedstock. So you’re going to have some level of reduction in supply.”
He says markets will adjust based on how much supply is available and how demand responds.
“That takes time, and this administration is all about fast track,” Suderman said. “You’re exactly right. We will see some of that. But first we need to assess what is the infrastructure damage. How much do we need to replace? And can we replace it quicker here in the states than what they can in the Middle East?”
Suderman stresses it is still too early to know when normal operations will resume.
Fertilizer trade will likely be front and center this week in Washington, D.C. U.S. Trade Representative Jamieson Greer is expected to testify twice before congressional committees. On Wednesday, Greer will appear before the House Ways and Means Committee. Then on Thursday, Greer will testify before the Senate Finance Committee.
Since the start of President Trump’s second term, “America First” has been the center of their trade policy, including finding ways to increase domestic production of critical farm supplies.
Greer is also expected to head to Mexico this week for talks on the USMCA agreement ahead of a scheduled review later this year. The trip comes as lawmakers highlight the deal’s role in supporting U.S. agriculture exports. A bipartisan group of more than 40 senators, including Ag Committee leaders, recently sent a letter to Greer pointing to the agreement’s benefits for the ag sector. More than 100 House lawmakers also signed onto a similar message last year.
Ag Secretary Brooke Rollins will also testify this week on Capitol Hill. On Wednesday, she will appear before the Senate Appropriations Ag panel, talking USDA spending for next year. President Trump’s latest budget proposal would cut USDA spending by 19 percent, or just shy of $5 billion.
Rollins is also expected to travel to Arizona this week. USDA continues to evaluate reopening the U.S.-Mexico border for cattle trade. Last week, Rollins said the U.S. was on a strong path, with no New World screwworm cases within hundreds of miles of the Arizona border. She’s hoping to get a first-hand look at the scene there at the Douglas Port of Entry.
With the Strait of Hormuz once again closed to commercial traffic, uncertainty is mounting about diesel prices and what geopolitical tensions could mean for fuel costs going forward. Petroleum Analyst Patrick De Haan with GasBuddy joined us on Monday’s Market Day Report to provide the latest insight into the petroleum sector and what farmers can expect as spring planting ramps up.
In his interview with RFD NEWS, De Haan discussed current conditions in energy markets and how disruptions in key global shipping routes are influencing fuel prices, and outlined what farmers may face in the coming days and weeks regarding diesel costs, especially as fieldwork accelerates across the country.
De Haan also addressed the unpredictability surrounding the situation in Iran and whether there is any indication of when fuel prices could begin to ease, and explained the ongoing back-and-forth over the Strait of Hormuz and how it complicates market signals, making it more difficult to forecast price trends.
Finally, De Haan highlighted additional factors beyond geopolitical tensions that are also influencing fuel markets.
Corey Rosenbusch with The Fertilizer Institute joined us to discuss supply chain disruptions and what farmers should watch as global tensions impact fertilizer markets.
