Fertilizer prices jump as strait of Hormuz closure hits farmers

The recent conflict in Iran, the following closure of the Strait of Hormuz, and the resulting impacts to global markets are hitting farmers particularly hard right now.

The wholesale price of urea, the nitrogen fertilizer the U.S. imports the most of, had a high-low spread of $460–480 per short ton the week of Feb. 27, just before the conflict began. By the following week, that spread was $520–620. 

“Obviously, that shows a significant jump, but also that's a huge spread over the course of a week to see that level of uncertainty in the trade, as far as how much product is going to be coming in,” said Veronica Nigh, chief economist with The Fertilizer Institute (TFI).

It’s a critical time for farmers to have access to nitrogen fertilizer. According to a March 9 analysis by the American Farm Bureau Federation (AFBF), in total, about 50% of nitrogen applied to corn, 28% applied to cotton, and 42% applied to spring wheat is typically applied in the spring.

John Newton, vice president of public policy and economic analysis at AFBF, said in a media briefing on March 9 that in 2025, the U.S. imported about 25 million metric tons of fertilizer, and that 25% of imports occur in March and April. 

Newton added that, because of poor economic conditions, a lower number of growers pre-purchased fertilizer this year compared to a normal year. “Fertilizer is not exactly logistically where it needs to be around the country for application,” he said. “That's another logistical challenge that we face.” 

Middle East Conflict Exacerbated Existing Problem

Fertilizer market factors were already working against a farmer’s bottom line before tensions escalated in the Middle East at the end of last month.

Bloomberg reported recently that the Department of Justice is investigating whether some of the nation’s largest fertilizer producers violated antitrust laws. The Iowa Corn Growers Association called the probe a “step in the right direction” in a statement.

Now, prices have only increased further because the Strait of Hormuz closure impacts a number of fertilizer components, including synthetic nitrogen sources.

“Nearly 50% of global urea exports originate from countries west of the Strait and transit through this critical waterway,” TFI said in a statement. As for ammonia, although the U.S. doesn’t normally import ammonia directly from the affected region, TFI emphasized that the impacts on the global market ultimately raise prices globally.

AFBF first called attention to the worsening supply and price issue in a statement on March 4, describing “reports of companies freezing fertilizer sales at a critical time with planting season coming into full swing.”

Luke Lindberg, USDA’s undersecretary for trade and foreign agricultural affairs, said in an interview with Politico that the Trump administration has been tracking price increases and that the president and Agriculture Secretary Brooke Rollins will make clear that “any company or any part of the fertilizer supply chain who tries to use this opportunity to price-gouge American farmers and ranchers will not be tolerated.”

American Farm Bureau Federation Calls for Action 

In a media briefing on March 9, AFBF President Zippy Duvall described the far-reaching implications of the situation. “It's not just a farm issue. It's a food security issue and an economic issue for the entire country,” he said.

AFBF is calling on the Trump administration for the following:

• Utilize the U.S. Navy to provide and maintain safe and reliable maritime transportation of fertilizer shipments through the Strait of Hormuz.
• Work with international partners to maintain open supply shipping lanes.
• Improve domestic transportation capacity so fertilizer can move through ports, rail systems, and inland waterways for farmers who need it for spring planning.
• Consider temporary policy adjustments, including relief from certain duties and transportation barriers that could help stabilize fertilizer supply and prices.
• Use all reliable federal tools to maintain and address the insurance and financial barriers that could prevent fertilizer shipments from reaching American farmers during this critical spring planning season.

The group is also calling on companies to “act responsibly” in their service to farmers.

“Farmers understand that global markets can be volatile, but they should not be taken advantage of during this time of geopolitical uncertainty,” Duvall said.

A Possible Solution for Some Farmers

In the face of the low supply and increasing price of synthetic fertilizer supplies, what can farmers do? One possibility is to turn to biological sources of nitrogen.

University of Kentucky Extension Professor Chad Lee said based on his data, nitrogen-fixing biologicals can be a supplement to nitrogen inputs for growers, but there are limitations.

Most replicated trials examining these microbial products show little-to-no effect in conventional systems, Lee said, but yield increases have been seen in high-residue systems.

“If you're in a no-till system with a cover crop and planting corn, there appears to be a spot for Proven 40 in that system, based on our trials,” Lee said.

Proven 40 is a biological product from Pivot Bio, a company that develops and markets nitrogen-fixing microbes as a replacement option for synthetic nitrogen. Its products have been used on more than 15 million cumulative acres through 2025.

While Proven 40 is a second-generation product for corn, Pivot Bio has since introduced Proven G3, its third-generation product for corn.

University data suggests performance of these products can vary widely by system, but Pivot Bio argues that fertilizer volatility highlights the value of biological alternatives.

Pivot Bio issued a press release on March 4 announcing an increase in production and lower cost of its products. The move was in response to the impacts caused by the attack in Iran, but its products decreased in price long before the Middle East conflict began. “[Over] the last two years, we've taken price down 30%,” said Chris Abbott, Pivot Bio CEO. 

Now, product prices will decrease an additional 10%, Abbott said, “just to prove a point … that we are completely dislocated from natural gas or synthetic nitrogen input pricing, or access to water or supply chain challenges.”

As for production, the company can supply 35 million acres of product annually, and they can scale to 94 million acres without a large capital investment.

Compared to synthetic nitrogen inputs, which may be internationally sourced, Pivot Bio’s products are domestically produced and a small enough size to be shipped within 24 hours to a grower. Abbott compared that short window to the longer process for products coming from the Middle East.

How Much Synthetic Nitrogen Can Be Offset?

To address how much biological product growers can use in their fertility program, Abbott pointed to field data from more than 100 farms that used Proven G3, which was launched in 2025.

“In 134 field trials with 129 growers nationwide, growers using Proven G3 [and employing best management practices] replaced an average of 33 pounds of synthetic nitrogen per acre and gained a 2.1 bushel-per-acre yield advantage as compared to the grower’s standard practices,” according to a company press release.

Lee plans to study Proven G3 this year. Regarding the results published by Pivot Bio, Lee said although the number of comparisons is “encouraging,” it’s a challenge to draw conclusions from any dataset that was compared to a farmer standard because of a lack of consistency in the nitrogen rate. “You don't know what exactly the farmer was doing in that situation,” Lee said.

To that point, Pivot Bio shared that its pivotsprovenit.com real time data platform publishes on-farm trial results, along with agronomy notes and management details, in an effort to provide transparency into how growers conducted the comparisons and the fertility programs used.

Lee said there are three steps that have to happen for a biological product to be effective at increasing yield. The product has to survive long enough to fix atmospheric nitrogen, the microbes have to produce enough nitrogen for the corn to take up, and the system has to be deficient in nitrogen in order for there to be a benefit from the biological process taking place. “All three of those have to occur in order to observe a yield increase,” Lee said. 

That’s why yield benefits are seen in no-till, cover crop systems, Lee said, adding that matters are “further compounded by the fact that you have some organic nitrogen being released from organic matter through the course of a season based on biological activity as well, which nobody can predict.”

Ultimately, for growers facing more extreme budgeting constraints, conversations surrounding fertilizer may go beyond product substitutions and supplements. Lee’s advice to anyone who can only afford about half their nitrogen is to switch to soybeans, if possible.

“By and large, at least farmers in this region, they really like their rotation,” he said. “They try to hold to the rotation as much as they possibly can. But I do think the operating loans come into play.” 

For those who can afford about 75% of their required nitrogen, Lee would advise them to supplement with a nitrogen stabilizer, sulfur, and biological products.