Key Takeaways:
The closure of the Strait of Hormuz has driven urea fertilizer prices up 77% since mid-December, from the equivalent of 75 bushels of corn per ton to 126 bushels, just as US farmers enter spring planting season.
One-third of global seaborne fertilizer passes through the Strait of Hormuz, and the disruption is projected to add roughly 2 percentage points to US food-at-home inflation on top of energy-driven increases.
This fertilizer shock is arriving simultaneously with $187 billion in SNAP cuts, record food bank demand, and the elimination of the only federal survey tracking food insecurity.
The Strait of Hormuz is closed. One-fifth of the world's oil passes through it. So does one-third of global seaborne fertilizer, including nearly half the world's urea and 30% of its ammonia. Following US-Israeli strikes on Iran on February 28, Iran shut the strait. Commercial shipping has effectively stopped. Sea mines have been deployed. Three commercial vessels were struck this week.
The immediate impact hit oil. Brent crude is above $100. But the fertilizer shock may be worse.
The Numbers Hitting American Farms Right Now
Urea prices at the New Orleans import hub jumped 32% in one week, from $516 per metric ton on February 27 to $683 on March 5. Since mid-December, urea prices have surged 77%. In December, one ton of urea cost US farmers the equivalent of 75 bushels of corn. This week, the same ton costs 126 bushels.
This is happening during spring planting season, when fertilizer demand peaks. Vessels from the Persian Gulf to the US Gulf Coast take 30 days. Supply disrupted today means shortages hitting during the most critical planting windows in March and April.
Seth Meyer, former USDA chief economist, told Fortune that margins are already poor and a bad decision this year could be costly. Corn, the most fertilizer-intensive crop in the US, is the backbone of the food supply. If fertilizer costs force farmers to plant less corn, the effects cascade. Corn feeds livestock. Corn syrup is in processed food. Ethanol is in gasoline.
Wolfe Research estimates the disruption could raise food-at-home inflation by roughly 2 percentage points, adding about 0.15 percentage points to headline inflation, on top of a 0.40 percentage point increase from energy. Food prices have already risen nearly 24% above pre-COVID levels. Goldman Sachs raised the probability of a recession within 12 months to 25%.
A UN report warned the impact will "increase food costs and intensify cost-of-living pressures, particularly for the most vulnerable."
The Collision No One Is Talking About
This fertilizer shock is arriving at the same moment as the largest reduction to food assistance in American history. The One Big Beautiful Bill Act cut $187 billion from SNAP through 2034. The Farm Bill advancing through Congress does nothing to reverse those cuts. An estimated 4 million people will lose benefits. Beginning October 2026, states must pay 75% of SNAP administrative costs and a share of benefit costs for the first time. Some states may withdraw from the program entirely.
Food banks are already at record demand. For every meal a food bank provides, SNAP provides nine. The USDA terminated the Household Food Security Report, the only comprehensive measure of hunger, last September. 47.9 million Americans were food insecure in 2024. That was the last number we will have.
Now add rising food prices from a fertilizer shock, on top of tariff-driven price increases, on top of energy costs, on top of SNAP cuts, on top of food bank funding losses. The government cut $1 billion from food bank programs earlier in 2025. The Emergency Food Assistance Program alone lost $500 million.
Americans are in the eye of a converging crisis. Systems shrinking from every direction simultaneously. The fertilizer makes the food more expensive. The SNAP cuts make less of it available to the people who need it most. The food banks that catch the overflow are already at capacity. And the government stopped counting.
People Also Ask
Q: How does the Strait of Hormuz affect food prices? A: One-third of global seaborne fertilizer passes through the Strait of Hormuz. Its closure has driven urea prices up 77% since mid-December, raising costs for farmers during spring planting season, which will flow through to higher food prices within months.
Q: How much could food prices rise from the Iran war? A: Wolfe Research estimates the disruption could raise US food-at-home inflation by approximately 2 percentage points, on top of energy-driven increases of about 0.40 percentage points to headline inflation.
Q: Why is the fertilizer shortage worse than the Ukraine disruption? A: The Persian Gulf accounts for a larger share of global fertilizer trade than Russia. Unlike the Ukraine disruption, where grain price spikes helped offset farmer costs, Iran is not a major grain producer, giving US farmers fewer ways to recoup higher input costs.
Q: When will food prices be affected by the Hormuz closure? A: Agricultural economists estimate a lag of several months before the full impact reaches grocery shelves, with some effects beginning during the spring planting season and becoming fully visible by late 2026.
Sources: CSIS | Fortune/Fertilizer | Fortune/Grocery | CNBC/Fertilizer | CNBC/Supply Chain | Bloomberg/UN | Prior WYDE coverage: Farm Bill Advances Without Reversing SNAP Cuts | Food Banks Hit Record Demand | Somalia Hunger Doubles