The Fertilizer Problem Rearing its Ugly Head
What today’s fertilizer crunch is telling us about the system we’ve built
Too long, didn’t read:
The current fertilizer spike tells a geopolitical story while exposing structural weaknesses that were already in place.
Farmers are being squeezed by rising input costs without the crop price support that helped offset previous shocks.
The biggest issues are reliance on a system with environmental leakage, finite resources, and limited flexibility.
The new fertilizer shock everyone is watching
The current fertilizer situation is being framed as a supply disruption, and that’s not wrong. The closure and restriction of the Strait of Hormuz have tightened global flows at exactly the wrong time in the production cycle, and markets are reacting accordingly. 
Fertilizer feedstocks are concentrated to the area. Depending on your source, the Persian Gulf region accounts for 40–50% of global urea exports, 26–30% of ammonia exports, and nearly 44% of seaborne sulfur (used to produce phosphate fertilizer). This affects almost every fertilizer we use. Even in the most optimistic scenario, prices are expected to remain elevated well beyond this season. NDSU modeling shows urea peaking around $782–$784 per ton in moderate scenarios and approaching $996 per ton under extended disruption, with elevated pricing persisting through at least 2027.
Why this is different than 2022
It’s easy to compare this moment to 2021–2022 fertilizer price spikes resulting from the Russia-Ukraine war and COVID, and assume we’ve seen this before. But the underlying dynamics are different this time. In 2022, the fertilizer shock was paired with a grain price rally. As described by NDSU, corn above $7.00 and strong commodity markets helped offset the increase in input costs. It wasn’t painless, but there was a built-in cushion that allowed many operations to absorb higher fertilizer prices without fundamentally changing their approach.
That cushion isn’t there today. The Strait of Hormuz is critical for fertilizer and energy flows, but it carries very little grain trade. This shock is heavily concentrated on the input side, with no corresponding upward pressure on crop prices, resulting in an asymmetric hit to farm margins. Crop prices are materially lower, which means the same or even slightly lower fertilizer prices create a much tighter margin environment. NDSU’s modeling reinforces that point.
Duration is a second significant difference. The 2022 spike was sharp and relatively short-lived, driven in part by panic buying and rapid market adjustment. The current disruption is expected to be slower. Infrastructure damage, shipping constraints, and energy market impacts all point toward elevated prices lasting multiple seasons.
A system already under pressure
Fertilizer was already a problem before the ships stopped moving. On the environmental side, we’ve produced a system where a meaningful portion of applied nutrients never actually makes it into the plant. When nitrogen, phosphorus, and potassium (NPK) are not taken up by plants, they are lost from the soil through processes like leaching (being washed deeper into the soil by water), runoff into nearby waterways, and in nitrogen’s case, volatilization or denitrification back into the atmosphere, often leading to environmental issues like water eutrophication. This causes both environmental and economic issues. When fertilizer prices rise, every lost unit of nutrient becomes more expensive to absorb.
So even before this disruption, agriculture was operating inside a system with three structural challenges: nutrient loss at scale, environmental consequences that continue to compound, and a resource base that is constrained and geopolitically sensitive.
The pressure farmers are feeling
According to the American Farm Bureau Federation, 70% of farmers report they cannot afford all the fertilizer they need this season, and six in ten say their financial situation has worsened. They reported nitrogen fertilizer prices have risen more than 30%, urea prices have increased 47%, and diesel prices have climbed 46%, increasing costs across fieldwork, transportation, and irrigation.
The difference from past fertilizer shocks lies on the revenue side. As mentioned previously, higher crop prices helped offset higher input costs previously. NDSU’s analysis shows fertilizer affordability as measured as the amount of crop needed to pay for fertilizer, reaching levels significantly worse than 2022, even when nominal prices are lower. We’re already seeing reduced application rates, shifts toward less fertilizer-intensive crops, and decisions to stretch inputs further across acres. Below you’ll see the fertilizer affordability figure considering an extended conflict scenario. To see the data from NDSU’s other scenarios, we highly recommend checking out the full paper.
The uncomfortable middle ground
When systems come under pressure, alternatives start to surface. That’s where the fertilizer conversation is heading now. Some of the responses are incremental. Farmers are already adjusting timing, splitting applications, leaning harder on efficiency tools, and in some cases shifting acreage toward crops that are less nutrient-intensive. We’re also seeing more interest in biologicals, enhanced efficiency fertilizers, and management strategies designed to reduce loss. None of these are new, but higher prices force them from “nice to have” into “necessary to consider.”
At the same time, there are structural questions starting to get louder. If a meaningful portion of nutrients is consistently lost from the system, then improving efficiency alone may not be enough. That’s where conversations enter the picture around entirely different approaches to fertilizer management.
One example is phosphite-based systems. The premise is that enabling crops to utilize phosphite instead of traditional phosphate could reduce total phosphorus demand and limit some of the loss pathways that exist today. There are claims around improved efficiency and reduced runoff, but it’s also true that these systems are not widely adopted, not fully validated at scale, and still carry a fair amount of skepticism.
So the question becomes, how seriously is the industry willing to evaluate a broader set of options? And how willing is it to adapt if the current system keeps tightening?
Where this leaves us
The fertilizer situation today will eventually stabilize, but thankfully, the policy response already underway suggests this is being treated as more than a short-term disruption.
Across multiple fronts, the federal government is signaling that fertilizer has become a heightened priority. USDA leadership has explicitly framed fertilizer dependence on foreign sources as a strategic risk, with a stated goal of reducing reliance on imports from countries like Russia and China over time. 
The federal government is moving on two tracks: stabilizing supply in the near term through trade adjustments and expanded import flexibility, while accelerating domestic production capacity through funding, permitting support, and broader coordination across agencies. U.S. Agriculture Secretary Brook Rollins projects that expansion could be meaningful over the next two years; however, this approach likely won’t completely insulate farmers from price increases in that time. Fertilizer is being elevated to a strategic priority, with policy increasingly focused on building a more resilient and durable supply system. This is a notable direction signaling that this isn’t a problem being left to solve itself.
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