Urea-to-corn price ratio hits record highs as Hormuz crisis changes nitrogen costs

In 2026, the urea-to-corn price ratio has reached unusually high levels. The Strait of Hormuz disruption led to uneven price increases in global nitrogen markets, making fertilizer less affordable and altering how U.S. corn growers manage nitrogen use.

Data from Agricultural Economic Insights (AEI.ag) shows that farm-level urea prices jumped 56% in the eight weeks after the Strait closed in early March. In the same period, anhydrous ammonia prices rose 33%. This difference has made anhydrous ammonia about USD 50 per acre cheaper for a standard 180-pound nitrogen application, a gap last seen during the fertilizer market disruptions in 2012 and 2022.

Nitrogen costs are expected to make up 21% of corn revenue in 2026, up from 18-19% in 2023-2025 and well above the 2010-2021 average of 17%. This jump is mostly due to higher urea prices, since about a third of the world’s urea supply usually passes through the Strait of Hormuz. In contrast, anhydrous ammonia is mainly produced from U.S. natural gas and shipped domestically, so it is less affected by global supply issues.

The widening price gap is encouraging growers to switch to anhydrous ammonia, especially through fall or pre-plant programs. Still, analysts note that many farms face constraints due to equipment, local infrastructure, and logistics. Terrain analysts expect average U.S. anhydrous ammonia prices to reach USD 760 per ton in 2026, while urea is projected at USD 620 per ton. These are both up from 2025 averages of USD 744 and USD 530 per ton.

Source: Michigan Farm News / AEI