The agriculture industry continues to grapple with the fallout of the U.S. and Israel’s war on Iran, with farmers around the world bracing for higher fertilizer prices, as crop protection products could see similar volatility as the war drags on, Rabobank shared in a recent webinar.
Many U.S. farmers already purchased and applied fertilizer for the 2026/27 season, getting ahead of the supply chain shock, said Stephen Nicholson, North American head of crops. The Gulf supplied the U.S. with 17% of its urea and 20% of its DAP/MAP in 2023, with the Strait of Hormuz being a crucial supply chain chokepoint, according to the North Dakota State University.
However, other countries are starting to enter their planting season, facing higher fertilizer prices, Nicholson said. “The canary in the coal mine will be India, Australia, and Brazil,” he added.
“Australia and India are going to be in their buying pattern here soon, and it will be interesting to see how they maneuver through this. ... We’ve already heard in Australia, some reduction in wheat acres because of high nitrogen prices,” Nicholson said.
Brazil is heading into its fertilizer-buying season, and Brazilian farmers are already discussing “kicking the can down the road” on purchases, Nicholson explained.
Why the Iran war is not just about fertilizers
The Iran war is not just disrupting the flow of nitrogen, phosphorus, and potassium (NPK), but it is also impacting important ingredients for crop protection products, Nicholson noted. For instance, 22% of all sulfur — a precursor to sulfuric acid for glyphosates — is produced by Gulf countries, per Columbia University data, Barron’s, and Rabobank data shared in the presentation.
Ultimately, U.S. farmers could face higher crop protection and fertilizer prices if markets do not stabilize, Nicholson said. Typically, U.S. growers apply fertilizers in the spring or the fall.
“As we get farther into the southern hemisphere buying season and planning, and then of course, as we get into the ‘27 planting season here in the Northern Hemisphere, we have a lot more concern about fertilizer costs and chemical costs,” Nicholson said.
Iran war’s long tail
The Iran war entered its second month, with President Trump raising the specter of further attacks, including on bridges and power plants, if the Strait of Hormuz isn’t opened by Tuesday, 8:00 PM EST. Last week, media reporting suggested Trump was considering drawing down attacks.
Regardless of when the war stops, the damage to Iran’s infrastructure and its importance to the global ag market is expected to have ripple effects for the future, Nicholson told AgTechNavigator.
“Each day the conflict continues, there is more damage to infrastructure and dwindling supplies of energy, chemicals, etc. — all contributing to higher prices. The other issue is — even if the war ends tomorrow — it is going to have a long tail. The infrastructure built up around the oil and chemical industry took years to build and will not come back online overnight. They are not turnkey operations,” he added.
