Most U.S. farmers can't afford all the fertilizer they need this year. Opening the Strait of Hormuz comes too late.

By Myra P. Saefong

Urea fertilizer prices have climbed 47% since the end of February, according to the American Farm Bureau Federation

The effective halt on transit through the Strait of Hormuz led to a jump of around 47% for urea fertilizer prices since the end of February, according to the American Farm Bureau Federation.

On Friday, Iran announced that the Strait of Hormuz is now open - at least while the cease-fire between Israel and Lebanon remains in place. But for American farmers who can't afford the fertilizer they need for the spring planting season, this might be coming too late.

"While the news of the strait opening up is good news, this is not going to have a significant impact anytime soon for farmers or consumers," said Gbenga Ajilore, chief economist at the Center on Budget and Policy Priorities, a nonpartisan research and policy institute based in Washington.

There are still concerns about the safety of going through the strait, so it will likely be a while before we see the same level of traffic that was happening before the Iran conflict, Ajilore noted.

In a post on X Friday, Iranian Foreign Minister Abbas Araghchi said that "in line with the cease-fire in Lebanon, the passage for all commercial vessels through [the] Strait of Hormuz is declared completely open" for the remaining period of the cease-fire.

But U.S. farmers have been dealing with a spike in fertilizer prices for weeks, as much of the world's supply of fertilizer had been stranded by the effective closure of one of the busiest maritime passageways on the globe since the start of the war on Feb. 28.

The closure of the strait meant that three of the world's 10 largest exporters of urea, a widely used nitrogen fertilizer, were effectively blocked from supplying the world, said Josh Linville, vice president of fertilizer at StoneX.

To make matters worse, India, the world's second-largest manufacturer of urea, relied on the liquefied-natural-gas shipments from the Persian Gulf to produce that fertilizer, Linville noted, so the loss of those shipments impacted its fertilizer production.

That has all led a rise of around 47% for urea fertilizer prices since the end of February, according to the American Farm Bureau Federation, the largest general U.S. farm organization.

The organization recently conducted a survey of U.S. farmers, and the results released this week show a dire situation for an agricultural industry dealing with rising costs for fertilizer and fuels in the middle of planting season.

It showed that 70% of the more than 5,700 farmers surveyed said they are unable to afford all the fertilizer they need this year, though the affordability varied by region. Of the farmers surveyed in the Southern region of the U.S., 78% said they couldn't afford all of the fertilizer they need for 2026.

Spring planting season has begun for much of the U.S. and can run into the month of May. Farmers also need more fertilizer as they grow their crops, so that's going to be an ongoing issue - with far-reaching effects for consumers.

Some farmers had been able to plan ahead and "prebook" their fertilizer purchases, the American Farm Bureau Federation's survey showed. In the Western region, 31% of farmers surveyed prebooked fertilizer purchases, while only 19% in the Southern region did.

"Farm economics have not 'made sense,'" meaning they haven't been profitable for the 2026 crop-growing year, said StoneX's Linville - so "pinched" farmers have put off buying materials for farm production, including fertilizer, until the last minute. "A lot of times, this has been rewarding. This time, [it] has been punishing," he said.

Financial markets are not yet convinced that the Strait of Hormuz is fully open, despite Iran's declaration Friday. A sudden reopening would likely see fertilizer prices fall, but "for many North American countries, it is too little, too late now for spring," said Linville.

The U.S., currently chair of the Group of 20 major economies, is urging G-20 members, the International Monetary Fund and the World Bank to work together to ensure fertilizer access, Reuters reported Friday, citing two sources familiar with the matter. Those sources also said U.S. Treasury Secretary Scott Bessent viewed fertilizer and agriculture supply chains as of essential importance.

As President Trump has said, any economic disruptions as a result of Iran's actions are "temporary," as the U.S.'s blockade of Iranian ports has been "successful and the Strait of Hormuz should be fully open soon," White House deputy press secretary Anna Kelly told MarketWatch by email Friday. "In order to ease the impact on American farmers during this period, the administration is authorizing the export of fertilizer and its precursors from Venezuela and temporarily waiving the Jones Act to help fertilizer flow freely to the United States."

Meanwhile, farmers who can't afford the fertilizer they need are likely considering a few money-saving moves. Those include reducing the fertilizer application per acre, planting soybeans instead because that crop is less fertilizer-intensive, and cutting acres entirely and not planting as much as they otherwise would, said Jake Hanley, chief growth officer and director of investments at Teucrium.

But applying less fertilizer, switching to soybeans or cutting acres entirely all result in the same outcome Hanley noted: lower production. And lower production suggests that the agricultural market may be in a situation were "usage outpaces production in the 2026-27 crop year, likely leading the market to dip into reserves to make up the difference, said Hanley.

The good news is that as much as prices have risen for fuel and fertilizer, the world still has surplus supplies of corn, soybeans and wheat currently, said Arlan Suderman, chief commodities economist at StoneX.

So for now, a shortage of fertilizer is not going to cause an immediate global food crisis as some people have implied, Suderman told MarketWatch. "There will be localized shortages, but not a global crisis," he said.

However, Hanley believes this year could be the hardest planting season for row-crop farmers without risk-management strategies since 2015-16, when a glut of supplies led to a downturn in prices. "The combination of soft grain prices, elevated input costs ... and elevated fuel is a margin story, not a revenue story," he said.

For consumers, the biggest commodity-level moves to watch are generally beef and proteins because of their likely higher feed costs, Hanley added, as well as corn-linked processed foods and ethanol, which is made from corn, a fertilizer-intensive crop.

Read: Americans are about to get a crash course in the global economy: Higher prices are coming for pineapples, plastic, chocolate and berries

-Myra P. Saefong

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04-17-26 1636ET