The nitrogen market entered 2026 with tight supplies and strong demand as Russia’s ongoing war with Ukraine disrupted production. Then, the Iran war happened, spiking fertilizer prices and raising the specter of global shortages of the crucial crop input.
This was the backdrop to nitrogen supplier CF Industries’ first quarter (Q1) 2026 results, ending March 31, as executives shared during an earning call on May 7. For the quarter, CF Industries achieved $1.99 billion in net sales, compared to $1.66 billion for the same quarter last year.
CF Industries prices rose due to tight nitrogen supplies, while urea ammonium nitrate solution and ammonium nitrate sales fell, the company shared in its financial reporting. In Q1, CF Industries generated an estimated 2.5 million tons of ammonia, running at 99% utilization of total manufacturing capacity.
“The conflict with Iran severely tightened the global nitrogen market — a dynamic we expect to continue for some time. Lost production cannot be recovered. Damaged nitrogen and upstream feedstock capacity must be restored, and global trade flows will require time to recalibrate. In addition, the Russia-Ukraine war continues to disrupt nitrogen production at Russian facilities,” said Christopher D. Bohn, CEO of CF Industries.
Geopolitical tensions are splitting the nitrogen industry into two, changing the “risk-return framework,” Bohn explained. Historically, top nitrogen producers were “defined by low natural gas costs alone,” he added.
“Recent supply disruptions from the Middle East and Russia show that low-cost feedstock is no longer enough. As a result, we see a clear divide within the first quartile. North America — where we have intentionally invested billions of dollars over decades to build the leading nitrogen manufacturing and distribution network — is low cost and low risk, representing premium-grade assets. This is in stark contrast to their approximately 50% of first quartile capacity that is fragile and exposed with low natural gas costs that are offset by extreme geopolitical exposure,” Bohn elaborated.
Fertilizer shocks ripple through the ag economy
Amid the volatility, CF Industries reconfigured its logistics to better serve U.S. farmers, Bohn explained. For instance, the fertilizer supplier used “Yazoo City Rail assets to move urea from Donaldsonville into the Corn Belt” and ammonia from Medicine Hat, Canada, to its U.S. distribution network, he added.
Countries like China, India, and Egypt are restricting fertilizer exports, which is putting pressure on global supplies, Bohn explained. “While CF Industries has flexibility to support our customers globally, there are not many options to overcome a supply disruption of this magnitude,” he added.
India started 2026 with low fertilizer supplies and domestic urea production, meaning its “urea import requirements will be substantial in 2026, potentially rising to 10 to 12 million metric tons,” Bohn explained. “This would be approximately 10 to 30% higher than 2025 and nearly double their 2024 imports,” he added.
“With this environment, we expect to see unmet demand in certain parts of the world. We believe Latin America, Africa, and Southeast Asia are areas where we will see lower fertilizer consumption. As application volume per acre decreases globally, yields will decline, which we expect to result in higher prices for corn, wheat, rice, cotton, and sugar,” Bohn elaborated.
