Global corn and wheat acreage may cut by 3% in 2026 due to growing fertilizer costs amid Middle Eastern conflict

The Iran war and the resulting near-shutdown of the Strait of Hormuz are expected to reduce planted area for corn and wheat each by 3% in 2026 compared with the prior year, as farmers shift away from nitrogen-intensive crops in response to soaring input costs, according to analysis published by the International Food Policy Research Institute in April.

Researchers Charlotte Hebebrand, Joseph Glauber, Rob Vos and Brendan Rice at IFPRI note that USDA prospective planting surveys conducted through the second week of March show soybean acreage rising 4% year-on-year — a reflection of growers substituting toward a crop that requires far less synthetic nitrogen to produce. The USDA data may not yet fully capture the acceleration in fertilizer costs that occurred in April and May, meaning actual acreage shifts could be larger.

In normal years, approximately 30% of global fertilizer trade moves through the Strait of Hormuz, along with roughly 20% of globally traded liquefied natural gas — the primary feedstock for nitrogen fertilizers — and about 27% of seaborne crude oil. The conflict that began in late February has effectively halted commercial shipping through the waterway.

The UN World Food Programme estimates that if oil prices remain above $100 per barrel through June 2026, the number of people facing acute food insecurity could increase by 45 million globally. Exposure is most acute in sub-Saharan Africa and South Asia. Ethiopia, for example, sources more than 90% of its nitrogen fertilizer from the Gulf via the port of Djibouti — a supply chain that was strained even before the war began.

The International Fertilizer Association’s most recent short-term outlook projected global nitrogen production capacity to increase by 4% in 2026 over 2024 levels, with phosphate and potash each rising 5%, as new plants commissioned before the conflict come online. IFPRI analysts said these additions are insufficient to offset the current disruptions, particularly in the near term when the planting season is already under way across the Northern Hemisphere.

China, which produces roughly 70–80% of its nitrogen fertilizer from coal rather than natural gas, faces less direct exposure to Gulf feedstock disruption. But IFPRI noted that China’s reduced incentive to shift toward LNG-based production could entrench coal-based manufacturing, with adverse climate implications over the long term.

Source: IFPRI