SPECIAL REPORT: Will The Fertilizer Shortage Create A Global Food Crisis? | Bruce Sherrick

Northern hemisphere secured pre-closure

Approximately one-third of global seaborne fertilizer passes through the Strait of Hormuz, but most supplies for the 2024 northern planting season had already transited before closures took effect, with fall applications of nitrogen and dry fertilizers largely completed.

Price shock without shortage

While farmers faced dramatic cost increases from tariffs on Canadian/Mexican imports and elevated energy prices, widespread physical shortages failed to materialize this season, with only isolated complaints about supplier prioritization rather than unplantable acreage.

Russia-Ukraine constraints persist

Black Sea fertilizer exports remain partially constrained from the earlier conflict, with ammonia pipelines destroyed and not fully restored, though workarounds have developed as trade routes adjusted over time.

Brazil's extreme import exposure

Brazil imports 95% of nitrogen and 72% of phosphate fertilizers compared to the US at only 13% and 16% respectively, making South American agriculture far more vulnerable to maritime disruptions despite the six-month offset growing cycle.

Universal potassium reliance

Both the US and Brazil import nearly 100% of potassium (K) fertilizer, creating a shared vulnerability for this specific nutrient regardless of domestic nitrogen or phosphate production capacity.

Energy-fertilizer nexus

Natural gas serves as the critical feedstock for nitrogen-based fertilizers, meaning energy price spikes transmit directly to agricultural input costs even before considering transportation impacts.

Asymmetric price effects

Unlike the Russia-Ukraine war which boosted commodity prices alongside input costs, the Hormuz crisis raised fertilizer and diesel expenses without corresponding output price increases, squeezing farmer margins rather than creating offsetting revenue.

Global trade rerouting underway

China is shifting soybean purchases to Argentina and Brazil while the US backfills demand in other markets, increasing transportation costs and depressing US farm prices through less efficient logistics networks.

Diesel cost pressure

High energy prices affect farming economics through both fertilizer production costs and direct fuel expenses for equipment operation, compounding financial stress beyond input availability.

Southern hemisphere countdown

If Hormuz closures extend one to two more months, Brazil and other southern hemisphere producers face severe constraints for planting seasons beginning in six months, as waterborne transport remains the only cost-effective method for bulk fertilizer movement.

Supply rationing potential

While current stocks prevent immediate crisis, prolonged disruptions could force farmers to ration inputs or switch to less fertilizer-intensive crops like soybeans, which fix nitrogen naturally and require minimal phosphate compared to corn.

Geopolitical fragility

The rerouting of global trade flows around tariffs and conflicts has already begun, creating permanent cost increases in agricultural supply chains that will persist regardless of when specific shipping lanes reopen.