Soybeans Win as Fertilizer Crisis Squeezes Corn Out

Urea up 55% since the Strait of Hormuz closed. Seventy percent of US farmers can't afford all their inputs. The ripple effects will reach well into 2027

14 May 2026

Urea prices have risen 55 per cent since US-Iran hostilities closed the Strait of Hormuz in late February, setting off a cascade of disruption in global fertilizer markets. Farmers across the United States, South America, and Europe are now cutting inputs and reordering what they plant.

Nitrogen-hungry corn is bearing the brunt. Producers in the US, Argentina, and parts of Europe are switching to soybeans, which draw nitrogen from the atmosphere through root bacteria and require far less synthetic fertilizer. According to a survey by the American Farm Bureau Federation conducted in April, 70 per cent of US farmers said they could not afford all the fertilizer required. In southern states, that share rises to 78 per cent.

No strategic reserves exist for fertilizer.

Geography makes the crisis harder to solve. Nations in and around the Persian Gulf supply roughly half of all globally traded urea, and no alternative source exists at comparable scale. Benchmark prices in Argentina have nearly doubled to around $1,000 per tonne. In the US market, urea rose close to 50 per cent in under three weeks.

Researchers at North Dakota State University project that even partial reopening of shipping lanes would still push urea to $784 per short ton by July, a 67 per cent increase from pre-conflict levels. A sustained closure could drive prices toward $1,000 by autumn. Infrastructure damage in the region will keep costs elevated through 2027 and into 2028, analysts warn, irrespective of any ceasefire.

Affordability pressures predate the conflict. Fertilizer costs had already risen 22 per cent in the year to February 2026, according to the Bureau of Labor Statistics, while crop prices failed to keep pace. US farm debt is now on course for a record $624.7 billion. For smaller farms that did not pre-purchase inputs, cutting planted area has become the default response.

Beyond individual farm gates, a shift of this magnitude in crop mix will reshape global grain balances, animal feed supply chains, and commodity prices through 2027. Fertilizer markets have entered territory not seen since 2022. Unlike that episode, no swift resolution appears likely.