The war in Iran is pushing already high fertilizer prices even higher.
DTN, a supplier price information platform, said seven out of eight major fertilizers more expensive at the end of February than they were a year earlier.
A barge of urea, a type of fertilizer, traded at $457 a ton on Friday, but by Monday that number rose to $550 per ton.
Andreas Hauskrecht, a professor at IU’s Kelley School of Business, said restrictions at the narrow Strait of Hormuz are tightening supply chains.
“This is a very, very narrow waterway,” he said. “We are talking here about a little more over 20 miles wide. When you take where vessels can go, it goes down to three, four miles. And those vessels are very easy to target.”
About a quarter of the globally traded nitrogen market runs through the Strait. Twenty percent of global demand for oil and gas also travels through the Strait.
That means added costs for farmers preparing for planting season in the coming weeks.
“We don't know how long the conflict will go, but every additional day where the Strait of Hormuz is blocked will significantly increase energy costs and the pump price,” he said.
In a Truth Social post, President Trump announced the U.S. will provide risk insurance and guarantees for the financial security of all maritime trade, and if necessary, the Navy will escort tankers through the Strait.
