This spring, the Iran War set in motion some fertilizer shortages, pushing nitrogen prices exponentially higher, much like in 2008 and 2022. Previous shortages were primarily driven by trade rerouting and had a fairly quick rebound to ‘normal’, but today’s fertilizer rebound will have a much longer timeline. Based on the continued political conflicts in the Middle East, it’s projected that we will see a ripple effect from tight supply chains, causing elevated pricing and sourcing issues into 2027 and beyond.
In 2024, global fertilizer production reached approximately 215.6 metric tons (equivalent to 2,204.6 pounds) of NPK, with N making up 124.3 million metric tons (Statista). The Middle East supplies approximately 60 million tons of fertilizer internationally, being responsible for 30% of urea exports and 50% of sulfur globally. As reported by CoBank, there is significant damage and shutdowns for production plants, including an estimated 31 ammonia plants in the Middle East, 49 plants in India, Pakistan and Bangladesh, and at least 20 plants in Ukraine that have been shut down, experienced damage, or have a lack of feedstock.
A potential deal to bring potash in from Belarus has been making headlines, but it appears that the country may not have much additional fertilizer for the U.S. market. Logistically, shipping routes through Lithuania, Poland, and Ukraine remain closed, which will make it difficult and potentially more expensive to move fertilizer into the U.S. than what is currently being purchased out of Canada. Additionally, potash fertilizer pricing has appeared steady since the 2022 disruptions, leaving analysts believing that nitrogen and phosphate pose larger threats and should be prioritized, with the greatest price exposure for DAP and MAP. While most of the domestic use of these fertilizers is supplied by U.S. production, 17% of these imports originate out of the Persian Gulf.
Ammonia and sulfur are the two biggest variable input costs for phosphate. China is the world’s largest phosphate supplier, and for the past nine months, they have had a ban on phosphate exports. It is estimated that with the recent opening of exports, 3 million metric tons of phosphate has entered global markets. Sulfur serves as another source of uncertainty, with Russia normally contributing 17% of the world’s tradable supply, but they have blocked all exports. With increased sulfur costs, Mosaic limited U.S. production, along with concerns over declining consumption of phosphate over the last five years. For reference, Sarah Fedorhcuk from Mosaic reports that the 10-year average price for sulfur is about $170/ton, but the price is currently over $1000/ton. Additionally, in June, an executive order was issued suspending countervailing duties on Moroccan phosphate fertilizer imports for eight months.
According to Josh Linville, vice president of fertilizer at StoneX, Russia has accounted for 40% of U.S. urea imports and 57% of urea ammonium nitrate (UAN) imports this year. Trade restrictions could significantly impact this supply, with H.R. 5334, authorizing up to a 500% tariff on Russian goods. At this time, it has passed the House but has not yet been signed, nor is it clear if duties will apply to fertilizer.
In July, the Fertilizer Investment & Expansion for Long-Term Domestic Supply (FIELDS) Program through the USDA was launched to expand domestic fertilizer manufacturing, strengthen America’s supply chain, and improve long-term affordability of fertilizer. This program is designed by supporting both “shovel-ready” projects by infusing funds to accelerate completion of ongoing construction and supporting brand-new facilities. The reality is, our foreign dependence on fertilizer exports won’t change dramatically until these large projects are designed and constructed, which will take at least 5 years. While this is a promising investment to reduce our need for fertilizer exports, it won’t be a solution for our current constraints.
Earlier, I provided the disclaimer that I am not an economist, but I know that many of you will appreciate monetary outlooks on fertilizer pricing. North Dakota State University projects 2027 fertilizer price averages at $496 per metric ton for urea, $666 for DAP, $660 for MAP, $619 for ammonia and $361 for UAN (Fertilizer Daily). These values are below post conflict peaks in early 2026 but remain well above pre-war figures.
The return of fertilizer pricing to pre–Iran War levels will not happen quickly. Nitrogen and phosphate supplies appear to be most at risk, as they are heavily exposed to production outages, raw material constraints, and uncertain trade flows. For retailers, it will be a challenge to manage supply security against inventory risk. And as farmers, nutrient decisions will remain under pressure to determine timing, pullback of applications for certain nutrients, coupled with other costly inputs such as diesel. Even if prices don’t rise to extremes, you should be prepared for increased difficulty managing and pricing fertilizer through the next few cropping years.
A quick disclaimer: I’m not an economist, and this isn’t intended to be a formal forecast or analysis of fertilizer markets. I have compiled this assessment based on my research into global fertilizer production areas and factors that may shape the market in the upcoming crop years.
Resources:
https://www.cobank.com/knowledge-exchange/why-higher-fertilizer-prices-are-here-to-stay
https://hayandforage.com/article-5853-Fertilizer-concerns-strengthen.html
https://www.statista.com/statistics/1290786/global-fertilizer-production-by-nutrient/
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As Fall sets in across the North Country, the growing season is coming to an end. Gardens are being cleared, farmers are bringing in the last crops of the season, and local markets are filled with the colors and flavors of fall. For many people...
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