Source: Zerno On-Line (Russia)
Fertilizer shortages US Canada are threatening forage production and increasing pressure on the agricultural sector. Specifically, rising prices and supply disruptions create serious challenges. Moreover, farmers in the US and Canada already face low profitability. Consequently, they risk disrupting their spring planting campaigns due to fertilizer shortages, Reuters reports.
Furthermore, fertilizer prices have risen by more than a third since the military conflict involving Iran effectively paralyzed part of global trade. Additionally, the US, which in some years imports up to half of its urea, is currently experiencing a shortage of approximately 25% of its standard purchase volumes for spring planting, according to data from the industry association The Fertilizer Institute.
Meanwhile, the situation could worsen if traders divert fertilizer shipments destined for the US to more profitable markets. Furthermore, analysts say the price gap in the US market exacerbates this risk. According to StoneX analyst Josh Linville, prices near the Port of New Orleans – a key entry point for imported supplies – are $119 per ton below global prices.
“There is a risk that vessels will be rerouted to more profitable destinations. Moreover, it is even theoretically possible to purchase fertilizers domestically for subsequent export,” the expert noted.
In response to the situation, the US Treasury announced measures to increase fertilizer imports from Venezuela “in support of American farmers.” At the same time, Washington is taking steps to restore the country’s energy sector, which has been in a protracted crisis.
However, experts note that Venezuela, despite being a producer of nitrogen fertilizers, will not be able to quickly increase supplies. Furthermore, recovering the industry will require significant investment and time.
Meanwhile, farmers who failed to purchase fertilizers in advance are faced with empty warehouses or extremely high prices. According to David Altrogge, a Canadian farmer from Saskatchewan, the cost of purchasing urea could be $44,000 Canadian dollars higher now than in December.
Fertilizer Shortages US Canada: Critical Supplies at Risk
The military conflict has effectively halted nitrogen fertilizer shipments from the Persian Gulf. Additionally, more than 30% of global nitrogen fertilizer exports, as well as key components such as sulfur, pass through the Strait of Hormuz, which is now blocked.
Unlike China, most countries do not maintain strategic fertilizer reserves. Meanwhile, the US distribution system largely operates on a just-in-time basis, without the accumulation of significant warehouse reserves.
“This is not a market where there is excess inventory. The entire system is extremely sensitive to supply disruptions,” noted Veronica Nye, an economist at The Fertilizer Institute.
Furthermore, the duration of the Strait of Hormuz blockage remains a key factor. Additionally, fertilizer shipments by sea take several weeks, after which additional domestic logistics are required. Moreover, fertilizer application must occur before the growing season begins, and any delays could render supplies useless for the 2026 harvest.
Risks to the Food Market
US Secretary of Agriculture Brooke Rollins stated that the administration is considering all possible measures to contain fertilizer prices, including additional farm support programs.
Currently, the government is distributing approximately $12 billion in aid to farmers. Meanwhile, industry associations are pushing for an expanded support package.
The American Farm Bureau Federation previously warned that fertilizer shortages could negatively impact the nation’s food supply.
Amid sharp price increases, Senator Josh Hawley has asked the US Department of Justice to investigate fertilizer producers for possible price gouging. According to him, product costs have risen by up to 32% since the conflict began.
However, the industry emphasizes that the price increase is a natural market response to a sharp global supply contraction.