Surging fertilizer prices are beginning to reshape global grain production, as farmers from Argentina to Europe cut nutrient use, switch into less input-intensive crops or scale back planting altogether, raising certain risks for wheat, corn and barley output in the 2026 season, and possibly beyond. 

The global fertilizer market is no stranger to supply disruptions and price swings, but the war between the United States and Iran has sent shockwaves through supply chains on a scale rarely seen in recent years. By disrupting trade flows through the Strait of Hormuz, a key artery for exports of urea, ammonia and sulfur, the conflict triggered a price spike that reverberated quickly across importing markets.

According to the European Commission, urea prices have jumped 55% since the conflict began in late February. In Argentina, benchmark urea prices surged to around $1,000 per tonne from $500 before the crisis, and even in countries rich in fertilizer supply, farmers warned inputs had become unaffordable.

Potential relief could be arriving soon as the US and Iran are expected to formally sign a tentative deal on June 19 which would halt hostilities between the two countries and reopen the Strait.

While the latest crisis is exceptional in scale, the global fertilizer market has been under significant strain for years.

The latest escalation in the Middle East fits into a broader pattern of recurrent stress tests for the fertilizer market rather than representing an entirely new type of disruption, said Doriana Milenkova, senior analyst with Rabobank.

“Over the past six years, the sector has repeatedly absorbed shocks — from pandemic-era logistics bottlenecks and energy price spikes to the Russia-Ukraine war — demonstrating a degree of resilience,” Milenkova said.

Yet judging by farmers’ reactions, this episode appears especially severe. During the peak of the 2022 disruption, global nitrogen fertilizer consumption fell by only 1.7%, and by less than 7% in Europe, where the impact was most acute, Milenkova noted.

Now, farmers across Europe are warning that they may not only scale back fertilizer use, but in some cases leave fields idle altogether.

“For the first time in the last 20 years, even before the start of sowing, it is clear that production costs exceed potential revenues, even with optimistic yield forecasts,” warned Juris Lazdiņš, head of Zemnieku Saeima, a Latvian farmers’ organization.

Lazdiņš said the impact of the crisis may soon be visible to the naked eye, as the number of abandoned agricultural fields in Eastern Europe could triple this year.

Even before the current conflict, the succession of shocks already had left fertilizer prices structurally elevated, making the latest surge particularly painful for growers, Milenkova said.

As a result, farmers’ complaints now are being heard even in countries where fertilizer is produced in abundance.

In Russia, the world’s second-largest fertilizer exporter, the agricultural association People’s Farmer recently called on the government to impose export duties on fertilizers to shield the domestic market from global price shocks.

“The price of fertilizers on the domestic market has risen sharply, reaching record highs, and many items are experiencing shortages,” said Oleg Sirota, chairman of People’s Farmer.

A decline in fertilizer use could sharply reduce farm profitability and, in the worst case, push grain producers into bankruptcy, Sirota added.

Farmers across the globe now appear to be confronting similar pressures. In Argentina, for example, growers told local media they were delaying purchases, cutting planned application rates, or considering a shift into lower-input crops such as barley and oats. Some warned that unless prices ease quickly, part of the wheat area could remain unplanted this season.

End of cheap fertilizer

Observers said the current price and supply turmoil in fertilizer markets is not merely another short-term disruption that the grain industry can soon leave behind.

The global fertilizer market likely is facing a structural shift toward greater volatility, said Aidan Connolly, president of AgriTech Capital.

“The Middle East escalation is the third act in a global drama of fragility,” Connolly said, citing the COVID-19 pandemic and the Russia-Ukraine conflict as earlier chapters. In his view, the latest disruptions mark a deeper turning point for the market. “It is no longer just a disruption; it is a structural pivot.”

Essentially, Connolly said, the industry is moving from a world of “just-in-time” supply to one of “just-in-case” resilience — a transition that is likely to have lasting consequences for global grain markets.

“This conflict cements fertilizer as a high-stakes geopolitical tool, forcing a permanent re-evaluation of global sourcing and accelerating demand for precision application technologies,” Connolly said.

This is more than another headline-driven price spike, added Nandini Roy Choudhury, senior analyst with Future Market Insights.

“It has the potential to become a structural shock if transit disruption, higher war-risk premiums, or damage to Gulf energy and export infrastructure persist,” Choudhury said.

The Food and Agriculture Organization (FAO) of the United Nations warned in March that global fertilizer prices could average 15% to 20% higher in the first half of 2026 if the crisis continues, which would be enough to materially alter crop economics in import-dependent regions, Choudhury added.

Farmers in Europe, already grappling with tightening environmental rules and elevated energy costs, are particularly vulnerable to the new fertilizer market architecture.

With 35% of global urea and 30% of ammonia exports at risk, trade flows are being diverted to costlier and less efficient routes, Connolly said, adding that Europe faces a particular “double squeeze” of high gas prices and disrupted imports.

“This is not just a cost issue; it is a physical availability crisis that could shift the competitive balance toward regions with domestic production,” Connolly added.

For Europe, Milenkova said, direct reliance on Middle Eastern fertilizer volumes is limited, but the indirect consequences are significant: reduced availability and higher prices for urea and ammonia from alternative suppliers such as Egypt and Algeria, as well as sharply higher natural gas prices that raise production costs for Europe’s marginal domestic producers.

Other import-dependent regions, including South Asia and parts of Latin America, face more acute physical supply risks because of their heavier reliance on Gulf exports, Milenkova said.

“Overall, the knock-on effect is tighter global availability and structurally higher costs for nitrogen and phosphate fertilizers, with price pressures transmitted internationally through energy markets, freight rates, and competition for a shrinking pool of safe exportable supply,” Milenkova added.

Mild short-term impact

Despite mounting concern over unsown fields, analysts do not yet expect the crisis to have a major negative impact on grain production in 2026.

Persistently high fertilizer prices, projected to rise by around 30% into 2026, do increase pressure on farmers, especially in Europe, but the risk of widespread land being left unsown remains limited in the near term, Milenkova said.

“The fertilizer impact is expected to be milder and delayed, as most volumes for the upcoming season were contracted before the conflict, whereas fuel prices pose a more immediate risk, with higher costs feeding directly into 2026 operations due to limited on-farm inventories and constrained hedging options,” Milenkova added.

At the same time, European farming systems are characterized by high fixed costs, notably land rents and bank debt, which reduce growers’ flexibility to suspend production altogether.

“As a result, farmers are far more likely to respond by optimizing application rates, switching fertilizer products, or adjusting crop rotations toward less input-intensive crops, rather than reducing planted area,” Milenkova said. “Scaling back planting typically becomes realistic only on low-productivity marginal land, or where EU support schemes explicitly incentivize rest areas under CAP programs.”

Still, a world in which fertilizer prices play a greater role in shaping grain output appears here to stay.

“Leaving fields unsown is a nuclear option, but reducing nitrogen intensity is already happening,” Connolly said. “Farmers are not simply quitting; they are adapting.”

Connolly said the industry already is seeing a shift toward “fertilizer-lite” crops such as soybeans over corn. European farm advisers increasingly are promoting precision nutrient application, crop rotation strategies designed to preserve soil fertility, and the use of microbial inoculants and adjuvants such as algae-based products.

As Choudhury explained, farmers usually respond to high fertilizer prices in stages. First, they optimize or reduce application rates, particularly on lower-margin acres. Then they may switch into crops with a different nutrient profile or lower upfront input burden. Actual acreage cuts or unsown fields usually occur only when several pressures hit at once: high fertilizer prices, weak grain prices, limited farm liquidity, and poor access to credit or input financing.

The World Bank already has warned that where input costs rise while crop prices weaken, some farmers may reduce fertilizer application rates, potentially lowering yields, Choudhury said, adding that the FAO has warned that reduced availability of ammonia-, urea-, phosphate-, and sulfur-based fertilizers could lower production of staple crops such as wheat, maize and rice within the next six to nine months.

“From my perspective, the winners will be those who use AI and digital twins to optimize every gram of nutrient,” Connolly said. “In the current environment, less is more is becoming a survival strategy, not just an environmental goal.”

Above all, analysts warned, the current fertilizer crisis could trigger a wider domino effect extending beyond agriculture.

“What is key to remember is that consumers still need to eat, so crops must be grown and livestock must be fed,” Connolly said. “Historically, hungry people vote for change.”