The Fertilizer Crisis That Will Hit Your Grocery Bill
Chart of the Week #98
Six weeks. That’s how long the Strait of Hormuz has been effectively closed. You know the oil story by now — Brent near $100, daily headlines about ceasefires that collapse within hours. But there’s a different side to this crisis — one that’s going to hit you at the grocery store, not the gas pump.
You see, the Strait of Hormuz isn’t just an oil chokepoint. It also handles major volumes of LNG and petrochemicals — and almost half of all seaborne fertilizer trade.
Break it down, and the Persian Gulf accounts for 30–35% of global urea exports, 20–30% of ammonia, around 12% of phosphate fertilizers, and roughly a quarter of globally traded sulfur. That’s, again, roughly half of the world's seaborne fertilizer supply running through a single chokepoint.
And unlike oil, there are no bypass pipelines for bulk ammonia. No strategic fertilizer reserve to tap. No shadow fleet of tankers quietly moving cargo with transponders off. When fertilizer gets stuck, it just stays stuck.
The prices are telling you exactly that. Urea at the Port of New Orleans — the benchmark for U.S. fertilizer — has blown past $650 per ton, up nearly 40% since the conflict began. Futures are above $690. Some spot markets are reportedly clearing well above $700. These aren’t numbers anyone budgeted for.
Here’s why that matters to you. Right now — this week, this month — is the spring planting window across the Northern Hemisphere. Farmers are deciding how many acres of what crop, how much fertilizer to apply, whether the math still works at $690 urea. Those decisions determine how much food the world produces for the rest of 2026. And they don’t get a do-over.
You can already see it in the data. Corn — the most nitrogen-intensive major grain, at roughly $166 per acre in nitrogen costs — is where the squeeze manifests most clearly. The U.S. Department of Agriculture’s February study flagged a potential shift away from corn toward soybeans. Their March 31 report confirmed it: corn acreage expected to fall 3.5%, soybeans up 4.3%. In short, farmers are doing the math and switching.
And here's the thing. None of this has hit the grocery store yet. Fertilizer prices lead. Food prices lag. But the basic economics still apply: less supply, same demand, higher prices. The damage being done right now — fewer acres, less fertilizer applied, smaller yields — won't show up on your receipt until the fall. By then, the planting window will have been closed for months and there won't be anything anyone can do about it.
And you know what’s not helping? China — the world’s largest fertilizer producer — has restricted exports of urea, phosphates, and nitrogen-potassium blends since mid-March. Industry sources say the restrictions won’t lift before August. The world’s largest alternative supply source pulled back at the exact moment the Gulf went offline.
I bet you haven't heard about that on the evening news.
Have a great rest of the weekend,
Lau Vegys
P.S. In our latest issue of Crisis Investing, we go through all of this in much greater detail — and name a specific position to profit from it. If you’re a paid subscriber, make sure you don’t miss it. And if you’re not yet on the paid side, the lead — featuring Doug Casey’s latest words of wisdom — is free to all.
Spoke to a UK farmer a few days ago, the fertiliser is bought and on the fields for the spring planting season here. Next year will be the problem.
Of course this shutting off so much of the supply of fertilizers for crop farming is very serious. On the other hand [not to be callous about the consternation it will cause for farmers and food supplies, food diplomacy, politics, geopolitical leveraging, etc] like so much that is being disrupted during this 4th Turning, the collapse of the old structures and practices was already baked into the forward struggle of history. We need to make the best of it that we can and try hard to create a more benign and equitable future for all of humanity.