The closure of the Strait of Hormuz has had an immediate impact on nitrogen fertilizer markets, but the full effects of the disruption may still be developing, according to an analysis by economists at the Agricultural Risk Policy Center at North Dakota State University.
U.S. fertilizer markets are relatively insulated in ammonia because of strong domestic production and in potash because it doesn't come from the Gulf. However, dependence on Persian Gulf–sourced urea and phosphate leaves the market exposed at a critical moment in the crop calendar.
“With the disruption unfolding just ahead of the spring planting season, a prolonged closure would likely be felt through higher input costs, tighter availability in selected fertilizers, and additional pressure on farm margins in 2026, with the effects likely to be most severe in regions at the end of supply chains,” the analysis notes.
The report was written by Shawn Arita, Rwit Chakravorty, Jiyeon Kim, Wuit Yi Lwin, and Sandro Steinbach.
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The authors compare the current disruption with the market shock that followed Russia’s 2022 invasion of Ukraine. Fertilizer prices rose roughly 20% to 40%, but peak levels were reached two to four months after the invasion.
In contrast, the 2026 Hormuz closure has triggered a much faster response in nitrogen markets, with urea prices climbing more than 28% within three weeks.
“Historical experience suggests the current effects may still be in an early phase,” the analysis notes. “Fertilizer prices often continue to rise for several months after the initial disruption, particularly when supply chains remain constrained, prompting buyers to adjust procurement strategies.”
