Projected Impact of the 2026 Strait of Hormuz Closure on Corn, Soybean, and Wheat Profitability in North Dakota

➩ Hormuz Closure Triggers Input Cost Shock. Operation Epic Fury triggered Iranian retaliation, halting commercial shipping through the world’s most critical fertilizer corridor. Urea prices rose 28.2% within three weeks of the closure, DAP 2.6%, MAP 1.5%, and potash 0.8%. Farm diesel prices rose 34.7% over the same period, creating a two-channel input cost shock that adds new pressure on top of an already-stressed North Dakota margin structure.

➩ Corn and Wheat Already in Negative Territory Before the Shock. The 2026 NDSU Projected Crop Budgets, published before the closure, show corn net returns at −$27.60/acre and wheat at −$33.41/acre. Both crops had entered the closure period in a worse position than at the onset of the 2022 Russia–Ukraine war, when corn stood at +$70.17/acre and wheat at +$24.15/acre.

➩ Corn Bears the Hormuz Burden Through the Nitrogen Channel. Corn’s high dependence on nitrogen fertilizers means urea alone accounts for $22.29 of the $23.21/acre total Hormuz fertilizer cost increase, equal to 96% of the fertilizer shock. Combined with $8.48/acre in additional fuel costs, corn faces a $31.70/acre total input shock. With corn prices rising only 3.6%, corn net returns worsen by $12.75/acre to −$40.35/acre.

➩ Wheat Shows a Negative Hormuz Outcome. Wheat’s 5.9% price response (+$17.12/acre) narrowly exceeded its $15.98/acre fertilizer cost increase; however, adding $5.20/acre in fuel costs pushes the total shock to $21.18/acre, resulting in a net margin decline of $4.07/acre to −$37.48/acre.

➩ Fuel Is a Key Shock Channel and the Primary Driver for Soybeans. Diesel prices rose 34.7%, adding $8.48/acre for corn, $4.98/acre for soybeans and $5.20/acre for wheat. For soybeans, which carry only $9.50/acre in fertilizer, the fuel shock ($4.98/acre) is larger than the fertilizer shock.

➩ Pre-Purchase Timing Bounds Fertilizer Exposure. A March 2026 producer survey (n = 27) found that 63% of respondents had locked in more than 75% of their nitrogen before March 1. At the survey-weighted central estimate (65.3% nitrogen and 59.7% phosphate locked in), corn’s fertilizer cost increase drops to $8.05/acre, but the $8.48/acre fuel shock applies in full regardless, for a total cost increase of $16.53/acre.

➩ Most North Dakota Producers Remain Exposed for Spring Fertilizer Purchases. Despite the strong pre-purchase rate, 51.9% of survey respondents reported they still have spring fertilizer purchases to make. The fall 2026 fertilizer contracting season, which was largely unpriced as of early March, represents a separate and potentially larger exposure window.

Recommended Citation Format: Rwit Chakravorty, Shawn Arita, and Sandro Steinbach (2026). Projected Impact of the 2026 Strait of Hormuz Closure on Corn, Soybean, and Wheat Profitability in North Dakota. ARPC White Paper 2026–05. Agricultural Risk Policy Center, North Dakota State University. https://doi.org/10.22004/ag.econ.396378