The ongoing conflict in Iran has triggered a cascade of economic consequences beyond the energy sector, with food prices now under threat due to disruptions in the supply of critical crop fertilizers. About one-third of the world’s fertilizer ingredients—key inputs farmers rely on to grow the crops that become everyday food items—transit through the Strait of Hormuz, a critical shipping chokepoint along Iran’s southern coast. This vital waterway has become a focal point of the escalating crisis, effectively shut down since the U.S.-Israeli attacks on Iran began on February 28.

Impact on Fertilizer and Food Supply Chains

Roughly one-fifth of global oil supplies also move through the narrow waterway, and with the strait now effectively closed, hundreds of tankers are sitting idle just outside the waterway, with seemingly nowhere to go. At least three cargo ships have come under direct attack from Iranian military forces, and there are growing fears that Iran has planted sea mines in the strait. The resulting uncertainty has forced shipping companies and oil tanker owners to avoid the region, exacerbating the already dire situation.

Oil prices have surged as a result, with U.S. crude topping $99 a barrel on Friday evening, up around 50% since the start of the war. The longer the conflict drags on, the greater the risk the disruption spreads beyond energy markets. According to Joe Brusuelas, chief economist at RSM, a less well-recognized risk is the threat the conflict poses to the global food supply chain, which depends on exports coming through the region.

The Middle East plays an outsized role in fertilizer production, largely because its natural gas reserves are the primary input used to produce ammonia, a key building block for nitrogen fertilizers like urea. Countries exposed to disruptions in the region because of the war—including Egypt, Iran, Qatar, Saudi Arabia, and the United Arab Emirates—account for about 49% of world urea exports and about 30% of ammonia exports, according to the American Farm Bureau Federation.

Global Fertilizer Markets Under Pressure

Fertilizer markets are globally integrated, meaning disruptions in one region could power prices and readiness elsewhere. Faith Parum, a Farm Bureau economist, noted that immoderate increases in costs or tightening of supplies overseas could quickly ripple through the world agriculture supply chain and thrust up the costs of food.

For American farmers, the uncertainty is already hitting home. John Boyd Jr., a fourth-generation farmer in Virginia who grows soybeans, maize, and wheat, said his fertilizer supplier recently warned him that shipments might not arrive as expected. The dealers are telling me we can’t get the fertilizer, Boyd told Beritaja in an interview this week. Due to the war and the bombing in that area, the fertilizer isn’t moving.

Fertilizer is essential to food production, he said, and it must be applied before crops are planted. If I don’t use fertilizer, that means I won’t have the yields to make my crop, Boyd explained. Going forward, he expects prices to rise as supplies tighten further.

As of March 10, ammonia prices in the Middle East were up 92% compared to a year earlier, while urea prices were up 70% over the same period, Brusuelas pointed out in his note. In the U.S., ammonia prices are currently 41% higher than they were in March, while urea prices have risen 21%.

Put simply: Higher fertilizer costs will lead to higher prices at U.S. supermarkets, he wrote. Already, food prices have been rising. According to the latest consumer price data released earlier this week, market prices rose 0.4% from January to February and are now up 2.4% compared to a year ago. The costs of eating out rose 0.3% over the same period, and are up 3.9% from a year earlier.

Timing is Critical for U.S. Agriculture

Now, with planting season underway, further disruption to fertilizer supplies could put further pressure on food prices in the months ahead. The timing is crucial for U.S. agriculture. This is when farmers purchase fertilizer, plow fields, and use nutrients needed to grow crops like maize and wheat.

With open planting season about the U.S., it is critical to ensure the safe transit of vessels carrying fertilizers through the Strait of Hormuz, Parum wrote. If farmers are unable to get the remaining supplies in time, we could see reductions or shifts in planted acreage and lower yields, which affects our nation’s food supply and the affordability of basic goods.

On Friday, Agriculture Secretary Brooke Rollins said the Trump administration is very close to having an announcement on potential solutions aimed at keeping fertilizer costs down for farmers. But she did not provide further details. Rollins said about farmers have already purchased fertilizer for the planting season, but conceded that about 25% have not, leaving them more exposed to rising prices.

Obviously, events around the world are impacting our farmers, she said at a White House event. But it’s not just fertilizer. Prices are also rising for diesel, which powers tractors, irrigation systems, and fertilizer spreaders.

Boyd said those higher fuel costs are already starting to strain his operation, in addition to the fertilizer fears. I have a tractor that requires 100 gallons of diesel fuel to get it up and running, and it costs me $469 just for a tank of diesel fuel, he said. That doesn’t last long.