Seven in ten U.S. farmers could not afford all the fertilizer they needed for the 2026 crop

According to an American Farm Bureau Federation (AFBF) survey of about 5,700 producers, nearly seven in ten U.S. crop farmers could not purchase all the fertilizer needed for the 2026 season. This finding, presented at an April 16 U.S. House Appropriations Committee hearing, clearly shows that fertilizer affordability declined significantly even before Iran’s renewed closure of the Strait of Hormuz on June 20.

The survey shows that the fertilizer crisis is not limited to short-term supply issues. Economists from the University of Illinois, North Dakota State University, and Agricultural Economic Insights (AEI.ag) report that fertilizer costs have risen steadily since the conflict began in late February. They warn that high nitrogen prices may influence farm purchasing decisions through the 2027 crop cycle.

Fertilizer costs surged before Hormuz fully closed

U.S. corn producers began 2026 with higher production costs. The USDA projected average fertilizer expenses at about $166 per acre, a 5.3% increase over the previous year. After commercial shipping through the Strait of Hormuz was disrupted on March 4, nitrogen markets tightened quickly.

AEI.ag reports that farm-level urea prices rose about 56% over the next eight weeks, while anhydrous ammonia increased by 33%. As a result, nitrogen accounted for roughly 21% of total corn production costs, the highest since 2022 and well above the long-term average of 17%.

Each $30-per-tonne increase in urea prices typically adds $15 to $20 per acre to nitrogen expenses. Many growers who had not secured fertilizer before the disruption faced production cost increases of over $50 per acre.

Growers faced difficult choices

University of Illinois researchers identified three practical options for farmers facing sharply higher fertilizer Farmers could either absorb the extra costs and maintain recommended application rates to protect yields, substitute lower-cost nitrogen products where possible, or reduce fertilizer applications and accept the risk of lower yields.p yields.

The Farm Bureau survey indicates that many producers chose to reduce fertilizer applications due to financial constraints and limited alternatives.

Research from farmdoc daily found that anhydrous ammonia offered a cost advantage of about $50 per acre over urea when supplying 180 pounds of nitrogen per acre. Such pricing gaps were last seen during the fertilizer crises of 2012 and 2022. Although some farmers switched products, storage limits, specialized equipment, and planting schedules prevented widespread substitution in the spring.

Corn growers remain the most exposed

Corn production is especially vulnerable because it requires significantly more nitrogen than soybeans or wheat, typically 150 to 200 pounds per acre.

Farmers in the Northern Plains and Upper Midwest were generally better positioned, as many use anhydrous ammonia applied in the fall or early spring. Those relying on imported urea or UAN solutions through Gulf Coast terminals faced larger cost increases.

Specialty crop growers in western states were also disproportionately affected, as fruit, vegetable, and horticultural production often relies on higher-value liquid and water-soluble nitrogen fertilizers that became more expensive during the disruption.

Government and industry sought to ease supply constraints

Agriculture Secretary Brooke Rollins told lawmakers the administration plans to use tariff revenues to support increased domestic fertilizer production. She noted that new capacity would take months, not weeks, to affect market prices.

To improve domestic logistics, the Trump administration temporarily waived the Jones Act starting March 17, allowing foreign-flagged vessels to transport fertilizer and petroleum products between U.S. ports for 60 days. By April 30, 23 domestic shipments, including two ammonia cargoes, had moved under the waiver. While this improved regional distribution, analysts concluded it could not offset the global supply loss from Middle East disruptions.

Industry responded by maximizing domestic production. CF Industries postponed maintenance at its Donaldsonville, Louisiana, facility, the world’s largest ammonia production site, to keep about 100,000 additional tonnes of granular urea available during the spring application season. The company also prioritized U.S. customers over higher-priced export markets.

Fertilizer budgets for 2027 are already under pressure

Although benchmark urea prices eased slightly after peaking in March, analysts warn that fertilizer markets remain vulnerable. By late June, urea futures had fallen to about $359 per tonne, 17% below spring highs but still well above 2025 levels.

North Dakota State University researchers estimate that under a “Contested Transit” scenario, where shipping through the Strait of Hormuz is only partially operational, urea prices could remain above $700 per short ton through November 2026. This period aligns with the fall prepay season, when many U.S. growers secure fertilizer for the next crop year.

Iran’s renewed closure of the Strait of Hormuz on June 20 makes it more likely that this scenario will become the market baseline. As a result, university economists and market analysts recommend that growers plan 2027 fertilizer budgets with higher nitrogen and phosphate prices in mind, consider forward purchasing where possible, and closely monitor global procurement events such as India’s major urea tenders, which often set international pricing benchmarks.

Source: farmdoc daily / AFBF

Five things to know about U.S. farm fertilizer costs in 2026