The war in Iran could raise global food prices as the conflict disrupts fertilizer shipments through one of the world’s most critical trade routes.
While energy markets have focused on oil supply risks, analysts say threats to fertilizer supply chains through the Straight of Hormuz may also bring long-term economic issues through food inflation.
“Beyond energy, another risk receiving less attention is the potential knock-on effect on food prices, as fertilizer shortages push agricultural costs higher,” said Wolfe Research chief economist Stephanie Roth in a note written on Tuesday.
Roth estimates the disruption could raise “food-at-home” inflation by roughly 2 percentage points, adding about 0.15 percentage points to headline inflation in the U.S., on top of roughly 0.40 percentage point increase from energy.
Those potential price hikes come as U.S. consumers face a sustained stretch of higher prices for food, housing and energy. Inflation for food at home climbed 2.4% year over year in February, the Bureau of Labor Statistics said Wednesday.
Customers shop at Walmart on January 22, 2026 in Little Rock, Arkansas.
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More than one-third of globally traded fertilizer passes through the Straight of Hormuz, making it a critical artery for agricultural supply chains. Commercial traffic through the route has largely been halted since the war started late last month, disrupting shipments just as farmers across the Northern Hemisphere prepare fields for spring planting.
The timing is critical because fertilizers are applied early in the crop cycle and help determine yields later in the year.
“If fertilizer supply tightens during this window, farmers may reduce application rates,” Roth said in the note. That could reduce yields for crops like corn, soybeans, wheat and rice and increase agricultural costs.
Economists in the fertilizer industry are equally concerned and say prices are already rising.
Between the weeks ending Feb. 27 and March 6 — which encompass the start of the war — the price per short ton of urea fertilizer imports in the U.S. jumped by 30%, according to data collected by industry advocacy group The Fertilizer Institute.
Urea — a nitrogen-based fertilizer widely used to boost crop yields — is one of the most heavily traded fertilizers moving through the region.
Higher fertilizer prices for farmers and retailers could ultimately raise food costs for consumers if the trade disruption lasts, said Veronica Nigh, chief economist at The Fertilizer Institute.
“This is a global impact on fertilizer costs,” said Nigh. “I would imagine that there would be much more passing on of these costs to consumers in this scenario, which is not something we have seen before.”
The U.S. relies on global fertilizer markets, importing roughly 20% of its total use, though nitrogen fertilizers like urea come from a more wide-ranging group of suppliers including Canada, Trinidad and Tobago, Russia and elsewhere.
The ripple effect could stretch around the world and beyond commodities. Asia and Africa are especially dependent on fertilizer exports from the Gulf region. Countries such as India rely heavily on Gulf supplies, while several African economies depend on imported materials used to produce fertilizers.
While disruptions to fertilizer shipments could lower crop yields for farmers and raise costs for households, fertilizer producers could stand to benefit.
CF Industries hit an all-time high Monday and shares are up nearly 10% over the past week, their biggest multi-day gain since 2022.
