Yara International ASA, a major fertilizer producer, anticipates a recovery in global fertilizer purchases as soon as the fourth quarter of this year, extending into the first quarter of 2027. This optimistic outlook comes despite previous reports from April 2026 indicating that Yara had increased deliveries by 2% in the first quarter of 2026, benefiting from increased margins on nitrogen-based fertilizers. However, the company also previously noted in an April 2026 statement that rising costs due to the ongoing conflict in the Middle East were already eroding demand for crop nutrients, leading to "demand rationing" as farmers faced difficult decisions.
While the Strait of Hormuz briefly reopened in April 2026, causing a sharp but temporary drop in fertilizer prices—urea fell about 18% to $640 per ton in New Orleans from a peak of $780—the overall trend has been one of elevated and volatile costs. The Iran conflict has significantly snarled supplies from the Middle East, a major producing region, causing prices of Egyptian urea, a key benchmark, to jump about 80% since the war began. This has led to farmers, such as Todd Littleton in Tennessee, experiencing an extra $100,000 in costs for spring planting alone.
The fragile ceasefire between the US and Iran, which is fraying, poses a continued risk to fertilizer supplies, especially to agricultural powerhouses in the Southern Hemisphere like Brazil and Argentina, as planting season approaches. The reliance on imports, with the US importing about a third of its fertilizer mainly from Canada, Russia, Southeast Asia, and the Middle East, makes the global market highly susceptible to geopolitical shocks. Although the USDA has committed $500 million to expand domestic fertilizer production, experts like Veronica Nigh from The Fertilizer Institute warn that building new plants can take five years and new mines up to 10 years, making quick fixes difficult.
