A recent Agri-Pulse article titled “Economists examine risks to fertilizer supply” features analysis by economists at the Agricultural Risk Policy Center (ARPC) at North Dakota State University, including Shawn Arita, Rwit Chakravorty, Jiyeon Kim, Wuit Yi Lwin, and Sandro Steinbach.

The article examines how the 2026 Strait of Hormuz closure is affecting fertilizer markets, highlighting that U.S. markets remain relatively insulated in ammonia due to strong domestic production and in potash due to limited reliance on Gulf supplies. However, dependence on Persian Gulf–sourced urea and phosphate leave the market exposed at a critical point in the crop calendar.

The analysis also emphasizes that the disruption comes just ahead of the spring planting season, raising concerns about higher input costs, tighter availability of selected fertilizers, and additional pressure on farm margins in 2026, particularly in regions at the end of supply chains.

Key insights from the article include:
• U.S. fertilizer markets show mixed exposure, with relative insulation in ammonia and potash but vulnerability in urea and phosphate.
• The timing of the disruption increases risks for producers as the spring planting season approaches.
• A prolonged closure could lead to higher input costs and tighter fertilizer availability.
• Farm margins are expected to face additional pressure in 2026, especially in regions farther from supply sources.
• Urea prices have already increased by more than 28% within three weeks, indicating a rapid market response.
• Historical evidence suggests fertilizer price impacts may continue to develop over several months.

Reflecting on these developments, Steinbach noted that “U.S. fertilizer markets show mixed exposure, with relative insulation in ammonia and potash but clear vulnerability in urea and phosphate.” He added that “the timing of this disruption, right ahead of the spring planting season, increases the risk of higher input costs and tighter availability, especially for producers at the end of supply chains.”

The Agri-Pulse article is available here: https://www.agri-pulse.com/articles/24424-economists-examine-risks-to-fertilizer-supply

Media Contact:
Agricultural Risk Policy Center (ARPC)
North Dakota State University
arpc@ndsu.edu
https://www.ndsu.edu/agriculture/arpc