PLATTE CITY, MISSOURI (RFD NEWS) — Global fertilizer markets remain under pressure as the Strait of Hormuz has been closed for 10 weeks. As the war in Iran continues, the closure of the Strait of Hormuz is disrupting global supply chains, with oil and fertilizer shipments held up in the region and adding pressure to already-rising input costs.
Josh Linville with StoneX says the shutdown is still disrupting major exporters and keeping sellers firm even as many buyers hold back, hoping prices eventually ease.
“It’s been 10 weeks—the Strait closed. I mean, we’re 24 hours from the 10-week anniversary of the whole Strait closing,” Linville explained. “So yeah, I’m a little tired, I’m frustrated. It’s been a hard year for myself — and listen, I’m not even dealing with it like the farmers are, right? It’s not hitting my pocketbook like it is for them.”
Nitrogen markets remain quiet on the surface, but supply problems are still significant. Urea production in Europe is running at about 75 percent of normal, Chinese exports are not expected until August, and blocked shipments from Iran, Qatar, and Saudi Arabia are tightening global trade flows.
North America is in better shape than much of the world. Most domestic demand for ammonia and liquid nitrogen is met domestically, and Linville’s demand model suggests that urea imports already in the pipeline should cover normal spring needs if exports, diversions, or demand do not rise.
Phosphate remains the bigger concern. He said China is still out of the export market, Saudi shipments are slowed, and key inputs like ammonia and sulfur are also being squeezed by the Strait closure.
Potash supplies appear adequate, but freight costs are pushing prices higher. Linville adds that availability and affordability are no longer the same thing in this market.
Now, the USDA is working to expand domestic fertilizer production, with nutrient supplies like phosphate expected to grow significantly in the coming years.
Fertilizer Economist Josh Linville with StoneX also joined us on Friday’s Market Day Report to provide additional perspective on the fertilizer outlook. In his interview with RFD News, Linville discussed his strong reaction to the USDA’s announcement to boost domestic production and said there are still many unanswered questions.
“I love the attention to the fertilizer market right now—this is exactly what we need,” Linville told RFD News. “The market hasn’t really been doing anything to build it substantially from where we’ve been, even though we have capacity across a couple of products. So, this push, if it helps reduce regulation and get to where it needs to be over the next few years, I’m all for it...But I did have some questions.”
Linville goes on to break down some of the key fertilizer markets — nitrogen, phosphate, potash — comparing his research with the USDA’s numbers on fertilizer market inflation. He said Rollins’ numbers are spot on.
However, his biggest question marks surround the goal of increasing phosphate production relative to the U.S. current phosphate reserves, noting that straining a finite resource only accelerates the process of running out.
“That’s the big question I have: Since I’ve been in the industry—I’ve been in and out for 24 years—the biggest conversation piece has been our phosphate rock reserves are declining in quality and declining in quantity,” Linville said. “So if you increase it by over 200%, that’s great for today, but if it’s a declining asset—if you’re running out of it—that just means you run out of it that much quicker.”
Linville also questions whether reciprocal trade with countries that have large phosphate supplies would makecould be made with countries that have large phosphate supplies, making more sense in the long term.
“And it’s why we’ve continued to say our hope, our belief, is that long term we need to start partnering with countries like Saudi Arabia, Morocco, Norway—who just found a massive phosphate rock reserve here earlier this year, late last year — these countries that have massive amounts of phosphate rock don’t need to worry about running out of it,” he continued. “They can increase their production with investment and continue to turn out the product that’s needed for the farmers. I think the partnerships need to be with those countries because, again, without that phosphate rock, you can’t produce phosphate. I think that’s just a situation where the global phosphate marketplace has changed. Plants like that—you can bring stuff in from around the world, you can buy phosphate rock. Well, the countries that have it have figured out, why would I sell the raw good when I can upgrade that myself and sell the finished good at a higher price?”
Linville also outlined the current fertilizer market situation and whether any price relief is expected before the end of the year.
“I think it’s just gotten harder and harder. And of course, you start to look at input costs,” he said. “The Strait of Hormuz continuing to be closed—three of your world’s 10 biggest anhydrous exporters are behind the Strait, according to Google. I’m not a sulfur guy, but according to Google, about half of the world’s tradable sulfur supply comes from there.
And your two biggest variable costs—those costs are extremely high today. The supply is very, very tight. So I think they just made a business decision and said, “Listen, we are a company, we are here to make money, and if this plant is not going to make us money, we’re just going to shut it down.”
Finally, Linville addressed concerns about fertilizer availability later this year, particularly for fall applications, and whether farmers could face challenges securing supply in the long term, and expects to be talking about the same issue this time next year.
“I think we’re still talking about this during the Spring of ’27,” Linville said. “Now, that does not mean that prices cannot get lower—they absolutely can. But I don’t think we’re going to get prices down to a level that we all think should be normal and attractive. I think it’s going to be a struggle. I’m just hopeful the Strait opens, and we get a little bit of quiet time.”
Once the Strait opens, he said, there is plenty of fertilizer waiting to move that needs an end destination.
“There’s a lot of product sitting on vessels behind the Strait of Hormuz—it’s going to be looking for somewhere to go,” he said. “I’m hoping this can kind of be the catalyst to drive this market down, give us at least a little bit of a window of opportunity for fall this summer.”
