How the Strait of Hormuz Trap Is Rattling the Corn Belt
With the spring planting window fast approaching, the war with Iran is triggering an unprecedented supply shock, leaving 75% of U.S. farmers exposed as they have yet to secure their fertilizer needs.
Factoring in the Corn Belt’s operational window likely would have pushed Operation ‘Epic Fury’ past the spring planting season. By triggering a supply shock in the Gulf and a maritime blockade at Hormuz, Washington has blindsided the U.S. agricultural sector at its most sensitive period, seemingly underestimating the domestic trade-offs of the intervention.
While the United States is not systemically dependent on the Middle East for its total fertilizer supply, it remains vulnerable in several critical segments. According to the American Farm Bureau Federation (AFBF), Saudi Arabia alone accounted for 39% of U.S. phosphate imports in 2024, while Qatar and Saudi Arabia combined for 16% of urea imports. The administration is now actively seeking alternative suppliers, as domestic production capacity cannot pivot fast enough to offset this supply shock.
The global fertilizer market is highly integrated and structurally sensitive to supply disruptions. Characterized by limited strategic reserves, the sector operates on a just-in-time basis due to high storage costs, stringent safety regulations, and the hygroscopic nature of the products. “Supply disruptions in one part of the world can ripple across the trade routes and affect availability and price in other regions. While the United States is both a fertilizer producer and importer, those same global supply dynamics play a role in determining input costs for American farmers,” explains the Fertilizer Institute.
The price surge has been as sudden as the supply shock, with increases ranging from 20% to 35% across all major nutrient categories. “Spot urea prices in the US Gulf have risen USD 132.50/short ton since the conflict began, their largest two-week increase since September 2022,” notes Rabobank. This spike comes at a time when input costs were already eroding farm margins.
Nitrogen Volatility Drives Acreage Reallocation
As of March 13, 75% of U.S. farmers had yet to secure their fertilizer needs for the spring season, according to US Secretary of Agriculture Brooke Rollins. To mitigate these costs, farmers are considering a significant acreage shift. Analysts suggest that 1 to 1.5 million acres could swing from corn to soybeans this spring. By pivoting away from corn, farmers hope to slash their nitrogen bills - inflated by natural gas prices and logistical bottlenecks - in favor of a crop with intrinsic nitrogen-fixing capabilities.
The Realpolitik of Phosphate
Securing phosphate supplies has become a top strategic priority. In 2025, many farmers had already deferred purchases due to high costs. “Imports fell by 25% year over year following the imposition of IEEPA tariffs,” says the National Corn Association, warning that further disruptions could “further inflame a tight supply/high price situation in the United States.“
Following the 2021 imposition of countervailing duties (CVD) on Moroccan and Russian phosphate fertilizers, Saudi Arabia emerged as the primary U.S. supplier. With China expected to extend its export freeze beyond August 2026, the Fertilizer Institute identifies Russia and Morocco as the only viable substitutes for Saudi volumes.
However, their ability to bridge the gap is far from guaranteed. “Russia is contending with domestic export limits and recent Ukrainian attacks on production plants, with industry sources reporting that companies are focused on meeting domestic demand,“ reports the CSIS (Center for Strategic and International Studies).
Morocco, the world’s leading phosphate producer, faces its own operational constraint: a 48% dependency on Gulf sulfur imports. Sulfur is the critical feedstock required for the acidulation of phosphate rock, effectively serving as the structural bottleneck for the entire industry. While Global Sovereign Advisory (GSA) noted on March 15 that “the country is said to have built up sufficient sulphur stocks to avoid being immediately affected by the crisis in the Gulf,” the long-term outlook remains precarious.
Furthermore, a reopening of the Strait of Hormuz appears unlikely in the short term. “The Pentagon confirmed this week that military options for escorting oil tankers through the strait have not been formally tasked, while the specifics of the DFC’s reinsurance mechanism are so far insufficient for shipping companies to offset the risk of traveling through the strait,” the CSIS explains.
Food Security Overrides Diplomacy: The Return of Sanctioned Origins
Food security is forcing Washington to engage with previously shunned suppliers. A coalition of agricultural groups has officially lobbied for the removal of duties on Moroccan and Russian fertilizers and the authorization of Venezuelan imports.
Their pleas have been heard. On March 13, the U.S. Treasury announced a partial easing of sanctions on Venezuelan fertilizers. Argus Media reported in December that the Department of Commerce would conduct a sunset review of Moroccan and Russian counterduties in March, potentially providing a window for administrative relief.
Finally, on March 19, Special Envoy John Coale announced in Minsk the total lifting of sanctions on Belarusian potash exports, which had been in place since the invasion of Ukraine.
The Trump administration understands that fertilizer inflation is a “slow-release poison.” Higher input costs first appear in planting shifts, then in yields and production costs, before eventually translating into grocery store inflation six to twelve months later. Ahead of the midterms, this lagged supply-side shock risks compromising the ‘affordability’ narrative at the core of the Republican agenda, transforming agricultural volatility into a political liability.