Anhydrous ammonia and urea prices have spiked 39% and 48% year-over-year, respectively, as the war in Iran disrupts global supply chains. Analysts from DTN note these jumps—especially after February’s conflict escalation—will hit farmers unevenly based on regional demand and pre-purchase timing. Farmers without existing fertilizer reserves now face steep costs to secure remaining supplies, threatening profit margins for corn and soybean producers.

The DTN report highlights that Midwest corn belts and Southern soybean hubs will feel the brunt, as these regions rely heavily on timely fertilizer application. Farmers who locked in prices before the war began are insulated, while others must pay premium rates for critical spring planting cycles. This volatility adds uncertainty to crop yield forecasts and farm income projections.

USDA officials warn that prolonged price hikes could trigger broader agricultural market instability. With planting seasons approaching, the lack of price hedging options for smaller farms raises concerns about reduced planting acreage. Analysts emphasize that fertilizer costs now account for 20-25% of total production expenses for key crops, up from 15% pre-war.

Iran’s blockade of maritime routes has forced producers to reroute shipments via costly alternative channels. While large agribusinesses may absorb some losses, family farms risk operational shutdowns. The fertilizer price surge underscores vulnerabilities in global food supply systems, with potential ripple effects on consumer prices and export competitiveness.