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The U.S. and Iranian governments agreed to a temporary ceasefire on Tuesday, but growers should not expect immediate fertilizer price relief, analysts warn. And if lasting peace doesn’t materialize, consumers will soon see higher food prices.
In a Truth Social post Tuesday evening, President Donald Trump said the U.S. and Iran had reached a deal for a two-week ceasefire, which Iran confirmed shortly after.
Trump said the truce is subject to Iran opening the Strait of Hormuz. But what that actually looks like in practice remains unclear. In a statement, Iran’s Foreign Minister Abbas Araghchi said that vessels can secure “safe passage” through the Strait “via coordination with Iran’s armed forces.”
Oil prices fell in the wake of the announcement, even as an Iranian drone attack struck Bahrain after the ceasefire declaration and Israel insisted the truce excludes Lebanon. But growers hoping for swift relief from high fertilizer and fuel prices may have to wait a little longer.
In an email to Agri-Pulse last week, United Nations Food and Agriculture Organization Chief Economist Máximo Torero warned that a ceasefire wouldn’t necessarily provide the market signals needed to quickly bring prices down.
Shipping insurance premiums have surged to as much as 10% of cargo values, Torero said. Companies that insure shipping vessels don’t update terms and prices based on diplomatic statements like those issued Tuesday, he added. Rather, they assess actual risks to vessels.
It could take months to get a clear picture of whether those risks have truly diminished, he argued, keeping transportation costs in the region high.
David Ortega, a food economist and professor at Michigan State University, agreed that a ceasefire deal may not be enough to reassure insurers that ships will be safe while in the strait.
David Ortega (Michigan State University photo)“You might be able to have a deal on paper, but who's willing to take the risk of safe passage for these vessels, given what we've seen?” Ortega said.
Similarly, backlogged deliveries of fertilizer and fuel could take months to clear, Tim Lang, a professor of food policy at City University London, said.
“You don't suddenly transport hundreds of thousands of tons of oil or urea or fertilizer or liquid gas and it jet hops to where it should have been five weeks ago,” Lang argued. “This is just a terrible shock.”
"This logistics bottleneck has no viable workaround in the short term,” Torero added.
Can consumers escape higher food prices?
Before the ceasefire announcement, some prominent economists and business leaders were warning of higher inflation.
JPMorgan CEO Jamie Dimon said in a letter to shareholders this week that the conflict could spur “stickier inflation,” while International Monetary Fund Managing Director Kristalina Georgieva told Reuters Monday that “all roads now lead to higher prices.”
There have also been signs that food prices could soon be affected. The United Nations’ Food Price Index, which tracks international shifts in commodity prices, rose 2.4% in March. If fuel prices remain high, Ortega warned that some commodities could begin to see higher prices in “a matter of weeks.”
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U.S. food inflation was at 3.1% in February 2026, before the conflict broke out, according to the Bureau of Labor Statistics, but if transportation and fertilizer prices remain high that could accelerate.
Perishable food items grown far from population centers, like berries, as well as products that use refrigerated trucks that need more fuel – including meat, dairy and seafood – would be the first to see price increases, Ortega said in an interview on Monday.
With the price of crude oil high, vegetable oil, which is a key ingredient for a raft of food products, has also already becoming more expensive. When global oil prices rise, it makes biofuel alternatives more appealing, which puts upward pressure on soybean oil, palm oil and other feedstock prices. The FAO Vegetable Oil Price index was up 5.1% in March from the previous month, and prices are 13.2% higher than a year earlier.
If the ceasefire holds, the price impacts may be muted. But if lasting peace doesn’t materialize, U.S. consumers could see a larger food price spike in the fall, Lang argued.
Tim Lang (City University London photo)While fuel and transportation costs are passed along to consumers in a matter of weeks, higher fertilizer prices take much longer to ripple through food systems and supply chains.
If producers internationally have pulled back on fertilizer application, as an early survey suggests those in the U.S. have, fertilizer-intensive commodities like rice, wheat and corn could see lower yields and higher prices, Torero said.
Former USDA economists Joe Glauber and Shawn Arita noted in new analysis Tuesday, however, that many of the underlying conditions that drove previous food price spikes, including those in the aftermath of Russia’s invasion of Ukraine, a global drought in 2010-2012 and a food price crunch in 2007-2008, are not weighing on global markets in 2026.
A strong forecasted growing season without adverse weather events or tight global stocks in key commodities should all mitigate the scale and duration of any price increases, they note.
“Despite the Iran crisis, current conditions remain more consistent overall with a late stage of a protracted period of low agricultural commodity prices,” they write, “rather than with the beginning of a new period of sustained high prices.”
