Fall 2026 fertilizer prices run 16–24% above prior year as Iran conflict weighs on farm budgets

Fall 2026 fertilizer prices are running well above levels seen in the previous two years, adding cost pressure to farmers weighing nitrogen and phosphate applications for the 2027 crop, according to a University of Illinois analysis published August 11. Anhydrous ammonia in Illinois averaged $915.50 per ton as of August 7, up 16% from the same point in 2025 and 23% higher than August 2024, based on USDA Agricultural Marketing Service retailer data.

The farmdoc daily report, authored by agricultural economists Nick Paulson, Gary Schnitkey, Ryan Batts, Bradley Zwilling and Carl Zulauf, found that anhydrous prices started 2026 around $840 per ton before surging past $1,100 per ton between early April and mid-June as the Strait of Hormuz conflict disrupted nitrogen trade flows. Prices have since retreated but remain elevated and volatile relative to recent history.

Diammonium phosphate prices in Illinois reached $912.22 per ton, 7% above the year-ago level and 24% higher than August 2024. DAP had been rising consistently since late February, climbing from roughly $830 per ton to above $900 as sulfur supply constraints lifted raw material costs for phosphate producers. Potash prices, by contrast, have remained comparatively stable in the $490 to $505 per ton range throughout 2026, running only modestly above 2025 levels.

Diesel fuel compounded the cost picture. Illinois diesel averaged $4.65 per gallon as of August 7, more than 50% above the same period in 2024 and 2025. Diesel peaked near $5.50 per gallon in early May before easing, but has climbed again since mid-July.

The economists noted that fall 2026 fertilizer prices present difficult management decisions for the 2027 crop year. Farmers may consider shifting a larger share of nutrient applications from fall to spring in hopes of lower prices, rethinking phosphorus replacement rates based on soil test levels, or increasing planned soybean acreage relative to corn to reduce overall fertilizer expense. The authors cautioned, however, that damaged infrastructure and logistics bottlenecks around the Strait of Hormuz could keep prices elevated even if the Iran conflict winds down.

Source: farmdoc daily / University of Illinois