Price of fertilizer

Fertilizer prices are projected to rise 4.4% in 2026, reflecting knock-on effects from the Iran conflict on global energy and shipping markets. The conflict has heightened security risks around the Strait of Hormuz, a key corridor for liquified natural gas (LNG) and petrochemical exports, pushing up risk premiums and disrupting flows. Tighter LNG supply from the Gulf and higher freight costs are expected to feed through to natural gas prices both globally and in the United States, raising the cost base for nitrogen fertilizer producers that depend on gas as a primary feedstock. The US relies on imported fertilizer inputs such as urea from countries including Qatar, so any shipping delays or insurance surcharges on vessels transiting the region will further inflate delivered costs. If geopolitical tensions and shipping disruptions persist longer than anticipated, these pressures are likely to compound throughout the year, keeping fertilizer prices elevated relative to 2025 levels and squeezing farm input budgets during the 2026 growing season.

The price of fertilizer fluctuated significantly between 2021 and 2026. In 2021, economic reopening, widespread supply chain disruptions and a surge in commodity input prices, such as natural gas, drove a 69.9% jump. The trend continued in 2022, with the war in Ukraine catalyzing these factors. It disrupted energy markets and fertilizer trade flows, compounding ongoing supply bottlenecks and global inflationary pressures. The high cost of natural gas directly influenced ammonia and broader nitrogen-based fertilizer prices, intensifying market volatility.

Fertilizer prices began to normalize in 2023, dropping by 26.7%. This reversal was driven by easing supply chain bottlenecks and declining natural gas prices, supported by robust US energy production. However, persistent inflation kept prices above pre-pandemic levels. Energy input costs continued to moderate, and global fertilizer demand eased alongside broader declines in industrial and agricultural production. Additional trends, such as changes in the value of the US dollar, shaped import and export competitiveness, while adverse weather, such as record floods, influenced demand and pricing dynamics in certain years. Fertilizer prices have exceeded 2021 levels, rising at a CAGR of 0.9% since then, but year-to-year volatility highlights the industry's pronounced sensitivity to input cost fluctuations, particularly in energy markets.