Many Farmers Are Not Panicking About High Fertilizer Prices. Here's Why.

By Kirk Maltais

Higher fertilizer prices from the war in Iran will hurt some U.S. farmers more than others, depending on where they are located and if they bought supplies ahead of the recent cost increase, analysts say.

Prices for anhydrous ammonia and urea, key ingredients for fertilizers used to grow corn and soybeans, have appreciated significantly year-over-year, with much of those gains coming after the war started in late February. Anhydrous ammonia prices have risen 39% versus this time last year, while urea prices have climbed 48%, according to assessments from research firm DTN. The uptick means that farmers that don't have all of the fertilizer they need on hand right now will need to pay significantly more for the rest.

Around 70% of farmers nationwide say that they are unable to afford all of the fertilizer they need for 2026 crops, with nearly 60% saying that their finances are worsening this year, according to the American Farm Bureau Federation in a survey published this week.

But the survey shows a sharp divide in different farming regions. In the U.S. Corn Belt, where nearly 90% of U.S. corn was grown in 2025 and 85% of soybeans, according to data from the Department of Agriculture, far more farmers booked their orders for 2026 ahead of the start of the spring planting season than they did in the Southern states. Only 19% of AFBF survey respondents from the Southern states spanning from Virginia to Texas reported pre-booked supply.

Analysts are speculating whether more-expensive fertilizer will mean weaker crop yields in the U.S., or if an increasing number of farmers will switch acres they had allotted to corn over to producing soybeans, a less fertilizer-intensive crop. The answer isn't straightforward, said Peter Meyer, principal economist with Muddy Boots Ag.

"This has become an extremely tough topic to quantify," Meyer said.

Preparations for this year's harvest in the Midwest began shortly after last year's crops were picked. Many farmers quickly pivot toward their budgets for the next year, including paying off operating loans from the prior season and locking into new operating loans for the coming spring.

Many get the supplies they need at this time as well. "I think the vast majority of corn farmers made their corn planting decisions in the fall, bought their seeds, and treated their fields in the autumn," said Sal Gilbertie, president of Teucrium Trading. "So the corn heavy places have only an issue of early planting season 'side dressing' when they apply another bit of fertilizer."

For these farmers, fertilizer is only one of many other inputs that are more expensive this year. Fuel costs jumped, farm labor is harder to come by and new equipment from suppliers like Deere remains prohibitively expensive for farmers who didn't make a profit on their planted acres in 2025, and don't stand to again in 2026.

This is one reason that the USDA expects planted corn acreage this year to decrease from a record-high in 2025, while soybean acreage looks to increase. In a report last month, the USDA projected farmers to plant 95.3 million acres of corn, along with 84.7 million acres of soybeans.

Analysts say the change in acreage has already been priced into futures trading on the Chicago Board of Trade, as have higher fertilizer costs. But if shipments on the Strait of Hormuz remain snarled through the summer with a war dragging on, then farmers across the board may find themselves vulnerable to higher prices when they get ready for planting in 2027.

"The longer this closure goes on though, we will see higher prices in 2027 futures prices," said Joe Davis, director of commodity sales with Chicago-based Futures International.

Write to Kirk Maltais at [e-mail]

(END) Dow Jones Newswires

04-16-26 1212ET