The consequences of the U.S.-Israel war against Iran have rippled far beyond oil markets. Strikes on natural gas infrastructure in the Middle East and the closure of the Strait of Hormuz have spiked global fertilizer prices during a critical period for farmers.

About one-third of global seaborne trade in fertilizers typically passes through the Strait of Hormuz, which has been largely closed to vessels since the U.S. and Israel attacked Iran on February 28. The war has also choked off production of natural gas, which is used as both the primary raw ingredient to produce ammonia fertilizer and as the largest energy source for the manufacturing process.

Since the war’s start, U.S. retail prices for some types of nitrogen-heavy fertilizer blends have increased by nearly 30 percent, according to prices published by trade publication DTN/ Progressive Farmer. The price of urea, a granular nitrogen fertilizer that dissolves in water and is vital for corn, wheat, rice, and cotton crops, has increased 45 percent since the war began.

The price spike has left the Trump Administration scrambling to soften the blow of soaring prices. Agriculture Secretary Brooke Rollins claimed in late April that the administration could divert tariff revenues to “invest” in domestic fertilizer production.

Global urea markets have been in “bad shape” since Russia invaded Ukraine in 2022, said Josh Linville, fertilizer market analyst with StoneX, in a recent podcast interview. Russia is one of the world’s top fertilizer producers, along with China. China announced in March it would restrict urea exports until August.

Now, the Iran war and closure of the strait are throttling nitrogen fertilizer shipping from top Middle East exporters – Iran, Qatar, and Saudi Arabia. Persian Gulf countries have been the single biggest regional exporters of urea and ammonia over the past three years, following Russia’s invasion of Ukraine, according to the International Food Policy Research Institute. Linville noted that the shortage of natural gas leaving the Gulf has also reduced nitrogen fertilizer output from factories in India and North Africa.

“It’s spreading,” Linville said of urea price shocks. “It started in a little corridor, and it’s starting to build out the longer this conflict goes on.”

Buying fertilizer ahead of time helped insulate some U.S. farmers from fertilizer price increases. In the Midwest, the main agricultural region of the U.S., about two-thirds of farmers who responded to an American Farm Bureau survey had pre-ordered fertilizer. Such farmers made up a minority in other regions, as low as 19 percent in the South. A vast majority of farmers nationwide – 70 percent – said they did not have enough money to buy all the fertilizer they need.

“In talking to some farmers recently, they say it's better than the first year of the Ukraine war,” said Rory Maguire, an expert in nutrient management and sustainable agriculture at Virginia Tech, in a university Q&A posted last week. “Prices are definitely up, but farmers should be able to find it. It's just going to cost more this year.”

The situation is worse for farmers around the world. Brazil, the world’s largest fertilizer importer, reduced its urea imports by about a third after prices spiked 35 percent in the first two weeks of the war. Australia, which imports about 60 percent of its urea from the Persian Gulf, is looking to Southeast Asian countries to shore up supply.

If the war and fertilizer shortages continue, it could have dire consequences for the global food supply. If the strait remains closed through June and oil prices remain at $100 per barrel or above, almost 45 million more people worldwide could be pushed into hunger, according to the U.N.’s World Food Programme.

“If this conflict continues, it will send shockwaves across the globe, and families who already cannot afford their next meal will be hit the hardest," said Carl Skau, the program’s deputy executive director, in mid-March.

In the U.S., federal economists predict that overall food prices will rise 2.9 percent this year. That increase factors in not only fertilizer costs but transportation fuel, as well as lower crop yields from drought-stricken areas. Ken Foster, professor of agricultural economics at Purdue University, wrote on March 31 that food price hikes due to the war will take “three to six months to fully reach grocery shelves.”

“But once embedded in retail prices, they are slow to come back down, even after the underlying cost pressure eases,” Foster wrote.

The scale and breadth of the shock to international oil markets also means that consumers cannot simply substitute one food product for another to avoid price spikes. “There are no ‘low-energy’ food categories in the modern food system,” he wrote.

In the U.S., cheap natural gas produced by the hydraulic fracturing boom of the last decade and a half has driven an expansion of nitrogen fertilizer factories. Companies have built eight new ammonia and fertilizer plants and 14 expansions since 2012 and are now planning 44 new plants and 17 more expansions, according to the Oil & Gas Watch Database.

These projects will not provide fast price relief for farmers, however, as companies take years to obtain permits for these projects and build them.

Since the start of the Iran war,  CF Industries, the largest nitrogen fertilizer producer in the U.S., delayed a planned maintenance of its Donaldsonville, Louisiana, complex – the world’s largest ammonia production facility – that would have temporarily taken production offline. Company officials said they want to keep up the production of supplies for spring planting season. The company has proposed to construct another ammonia plant at its Blue Point Complex in Louisiana. However, residents have filed lawsuits protect cultural heritage and force public accountability and transparency as the state and federal governments move aggressively to incentivize industrialization of the troubled RiverPlex MegaPark, an industrial complex targeting the West Bank of Ascension Parish.

CF Industries and its competitors are among the few who are benefitting financially from the fertilizer squeeze. These companies have seen natural gas input costs remain low while watching the price of their finished product keep moving upward, said Linville, the fertilizer market analyst with StoneX.

“I don’t think a lot of the folks working for those companies are enjoying this, it makes for a lot of hard conversations,” Linville said. “But when it comes down to the end of the day, the financial side is going to be booming.”