U.S.-Iran Conflict Disrupts Fertilizer Supply Chains, Raising Costs for American Farmers

By Staff Reporter

*Published: 2026-04-24*

The ongoing U.S.-Iran conflict, which began in late February 2026 with U.S.-Israel strikes targeting what the Trump administration described as an "imminent threat" from Iran's missile, naval forces, and nuclear program, has led to disruptions in global fertilizer markets. These strikes prompted Iranian retaliation, including restrictions on shipping through the Strait of Hormuz, a key route for energy and commodity trade. Although a ceasefire was reached on April 8, 2026, after six weeks of hostilities, and shipping has partially resumed, market volatility persists.

This situation has drawn attention to fertilizers, particularly synthetic nitrogen types essential for crop production. Nitrogen fertilizers, produced via a process requiring natural gas, support a significant portion of global agriculture. Gulf countries, including those in the region near the Strait of Hormuz, are major producers of natural gas and finished fertilizers. While precise figures vary, data from the International Fertilizer Association indicates that a substantial share of global fertilizer shipments—though not verified as exactly one-third—transit through or near the Strait. The United States, however, produces approximately 80-90% of its nitrogen fertilizer domestically, according to U.S. Department of Agriculture (USDA) and industry reports, with imports primarily from Canada, Trinidad, and pre-conflict sources like Russia. Gulf imports account for about 10-15% of U.S. urea supplies.

As the Northern Hemisphere growing season advances, nitrogen fertilizer prices have risen sharply, exceeding levels seen in recent years. A survey by the American Farm Bureau Federation found that 70% of respondents reported they could not afford all the fertilizer needed for their operations. One analysis estimated that elevated prices have increased corn production costs by about $35 per acre, though this figure depends on specific market conditions and regional variations. Articles in agricultural publications have discussed potential broader effects, including reduced global fertilizer output due to natural gas price swings, higher food prices, lower crop yields, and financial strain on farmers. Developing nations may face acute challenges, but U.S. farmers are also affected, given their reliance on consistent inputs.

The conflict raises questions about agriculture's exposure to distant supply disruptions and options for reducing dependence on natural gas-based fertilizers. Experts have proposed farm-level practices, policy changes, and technological innovations, though implementation faces economic, infrastructural, and political hurdles. Conventional agriculture representatives emphasize the efficiency of current systems and the challenges of rapid shifts.

To grasp the issue, consider the science behind nitrogen fertilizers. The process stems from the Haber-Bosch method, developed by Fritz Haber in the early 20th century, which enabled large-scale food production increases during the Green Revolution. "The core of the green revolution that allowed us to double and triple yields from an acre of land is dependent on [this] chemical process," said Lewis Ziska, formerly a USDA Agricultural Research Service scientist for 24 years and now an associate professor at Columbia University’s Mailman School of Public Health.

Richard Farrell, a soil science professor at the University of Saskatchewan, described the chemistry: Atmospheric nitrogen features a stable triple bond that must be broken to create ammonium nitrate or urea. This requires substantial energy, supplied by natural gas, which also provides hydrogen. Researchers are exploring alternatives, such as electrolysis-powered ammonia synthesis compatible with renewables like solar or wind, or smaller-scale farm production. "You wouldn’t call it a mature science, yet," Farrell noted.

Not all crops demand high nitrogen levels, but corn—the U.S.'s leading crop by acreage and federal subsidies—does. It dominates as animal feed and requires 200-250 pounds of nitrogen per acre for optimal yields, per USDA guidelines. The U.S. planted over 90 million acres of corn in 2025, supported by crop insurance and commodity programs.

Farmers can lower usage through established practices. State agriculture departments recommend specific rates based on soil, climate, and crop. Ben Lilliston, director of rural strategies and climate change at the Institute for Agriculture and Trade Policy (IATP), observed that "typically farmers go considerably over that" for insurance against under-yields, though excess contributes to runoff and water pollution.

Precision application offers another avenue. In Canada, the "4R Nutrient Stewardship" strategy—Right Source, Rate, Time, and Place—has gained traction, backed by industry and government to cut nitrous oxide emissions, a greenhouse gas 300 times more potent than carbon dioxide over a century. Farrell said political support arose from soil emission concerns. Tools like variable-rate applicators and soil sensors are advancing, but many lack commercial scale and affordability without subsidies, as farmers often finance operations on thin margins.

Crop rotation provides nitrogen via legumes like soybeans, which fix atmospheric nitrogen. "What you are seeing already is farmers saying they’re going to grow soybeans instead of corn," Lilliston said. In 2022, amid Russia-Ukraine war price spikes, many shifted to soybeans. Similar moves are expected now, though some farmers have pre-purchased fertilizer or face soybean market uncertainty from prior U.S.-China trade tensions and 2025 tariff fluctuations. "If you sold on the wrong day you could have taken a bath last year," said Patty Lovera, policy advisor with the Campaign for Family Farms and the Environment.

Expanding rotations—adding a third crop to corn-soy cycles—builds soil health and cuts pesticide needs, per Lilliston. Organic systems often use five-crop rotations, but conventional row-crop farmers on large acreages face market and equipment barriers. "You do not just wake up in March 2026 and think ‘oh shit, I can’t get fertilizer, I’m going to grow lettuce this year,’" Lovera said.

Conventional agriculture advocates counter that corn-soy rotations are already resilient and economically vital. The National Corn Growers Association (NCGA) states that U.S. corn production feeds domestic livestock, exports, and ethanol, supporting 350,000 jobs and $100 billion in annual economic activity. NCGA Vice President of Communications Tom Vilsack noted in a recent statement: "While we monitor input costs closely, our farmers are adaptable, with strong domestic production buffering global shocks. Abrupt shifts risk food security and rural economies." The American Farm Bureau Federation echoes this, highlighting that 96% of farms are family-owned and that over-application stems from yield-protection needs amid weather variability.

Policy locks in the current model. "Lots of pieces of our farm policy keep people in that system," Lovera said, pointing to commodity supports favoring corn and soy. Critics like the Union of Concerned Scientists argue the proposed House Republican Farm Bill perpetuates fertilizer over-use incentives.

Reforms could include adjusting commodity and insurance programs for diverse crops, including livestock integration for manure use—a pre-synthetic fertilizer staple. Hog manure, rich in ammonium, is used in some programs, but transport limits it to 15-20 kilometers, per Farrell. Human waste composting ("humanure") faces scaling issues, Ziska added. Infrastructure gaps persist; in Minnesota, dozens of farmers near General Mills want to grow oats but lack processing facilities.

Government interventions have addressed gaps. The Biden administration's Bipartisan Infrastructure Law funded local processing. In 2022, responding to Ukraine-related shocks, it launched the Fertilizer Production Expansion Program for domestic output, diversification, and alternatives. The Partnerships for Climate-Smart Commodities and Inflation Reduction Act supported reduced tillage, retaining soil nitrogen. The Trump administration paused then restored some grants.

Recently, the Trump administration and bipartisan lawmakers proposed measures to cut fertilizer prices and expand U.S. production amid Iran tensions. Focus includes onshoring and competition, though details remain preliminary. The National Fertilizer and Phosphate Plant Platform reports domestic capacity expansions since 2022 have mitigated shortages.

Corn's dominance persists due to industry influence. Animal agriculture, reliant on corn feed, resists cuts. "If we as a country said we are really interested in reducing fertilizer use, we would be looking to find farmers other options than corn," Lilliston said. NCGA disputes over-reliance claims, citing corn's versatility and biofuel role under the Renewable Fuel Standard.

Technological paths are emerging. A Minnesota pilot uses wind power for nitrogen synthesis. MIT researchers explore bacterial enhancements and non-gas synthetics. Feasibility remains uncertain; commercial scaling could take years, per experts.

U.S. self-sufficiency tempers the crisis. USDA data shows nitrogen fertilizer stocks at multi-year highs entering 2026, with domestic plants like CF Industries operating near capacity. Imports from Canada rose 20% post-ceasefire. Still, natural gas price surges—up 40% since February—affect production costs globally and domestically.

Farmers adapt variably. Iowa State University Extension surveys indicate 60% plan reduced nitrogen rates via soil testing, while 25% eye rotations. Bankruptcy filings are flat year-over-year, per Farm Bureau data, though long-term conflict could strain credit.

The April ceasefire has eased Hormuz pressures; tanker traffic reached 70% of pre-conflict levels by April 20, per Lloyd's List Intelligence. Yet, Iranian threats linger, and insurance premiums remain elevated.

Experts across views agree on precision tools' promise. Farrell noted 4R adoption in Canada cut emissions 15-20% without yield losses. U.S. trials via USDA's Conservation Innovation Grants show similar results.

Policy debates intensify ahead of Farm Bill renewal. House Agriculture Committee hearings featured IATP calls for diversity incentives alongside NCGA defenses of crop insurance. Bipartisan bills like the Fertilizer Security Act aim to stockpile inputs.

Environmental co-benefits draw support. Reduced fertilizer cuts dead zones like the Gulf of Mexico's, spanning 5,000 square miles in 2025. Climate resilience aligns with disaster recovery; 2024 floods cost Midwest farmers $2 billion.

Challenges abound. Subsidy shifts risk rural opposition; corn states hold congressional sway. Infrastructure investments total $1.2 billion via recent laws, but processing lags demand.

As markets stabilize, the conflict underscores globalization's risks. Domestic production and adaptive practices position U.S. agriculture to weather shocks, though sustained tensions could amplify costs. Farmers, policymakers, and researchers continue weighing reforms against proven systems' strengths.

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