Iran War Deprives U.S. Farmers of Affordable Fertiliser as Spring Planting Looms

Farmers in the U.S. and Canada, already worried about another year of low profits or losses, now could have spring planting disrupted as they struggle to find fertiliser. Prices for any available supplies have spiked more than a third since the war in Iran paralysed global trade.
The U.S., which in some years imports half of its urea fertiliser, is about 25% short of the usual supplies that farmers buy for spring planting, according to The Fertiliser Institute, which represents the U.S. fertiliser supply chain. Supplies could grow still scarcer if fertiliser destined for the U.S. gets rerouted to other places willing to pay more for it, an analyst said.
Josh Linville, a fertiliser market analyst at StoneX, said the price offered in New Orleans, the port area where most offshore U.S. imports enter, and prices are set, is as much as $119 less per metric ton than global prices.
Late Friday, the U.S. Treasury Department said it was taking immediate steps to allow for more imports of Venezuelan fertiliser "to support our great American farmers. “Since removing Venezuela's President Nicolas Maduro in a military raid in January, the Trump administration has been supporting U.S.-focused Venezuelan oil exports. Friday's announcement also includes further measures that Treasury says will allow Venezuela's energy sector to recover from years of decline.
Venezuela has been a significant but not dominant producer of nitrogen fertilisers like urea. However, recent years have seen a massive decline in production, similar to its stumbling crude oil industry. Increasing fertiliser production in Venezuela's stressed economy and political situation will be a challenge requiring billions of dollars, analysts told Reuters. It will not be a quick fix. Farmers who do significant springtime fertiliser application and have not already purchased their supplies are finding retail centres empty or stocked with supplies sold at such a premium that it's unaffordable.
Furthermore, the Iran war has cut off critical nitrogen fertiliser supplies from the Gulf to the world's farmers. More than 30% of the world's nitrogen fertiliser exports, as well as fertiliser components like sulphur, pass through the now effectively closed Strait of Hormuz. Unlike China, most countries do not hold strategic reserves of fertiliser, and much of the U.S. fertiliser dealer system does not hold stocks, leaving it vulnerable to sudden supply shortages.
The length of time that the Strait of Hormuz is closed is critical. Fertiliser loaded onto ships in the Gulf can take weeks to reach markets like the U.S., and then must be transferred to river barges, trucks or trains to reach farmland. Most fertiliser needs to be applied before the crop starts growing, so any supplies arriving too late cannot be used for the 2026 crop.
On Friday, U.S. Agriculture Secretary Brooke Rollins said the Trump administration is "looking at every potential avenue" to control fertiliser costs and is having discussions with lawmakers about more aid for farmers. The Trump administration is in the process of distributing $12 billion in aid to U.S. farmers. Farmer groups have urged Congress to approve additional aid.

(Source: Reuters)