Strait of Hormuz stoppage snarls fertilizer supplies as Minnesota farmers watch prices

The war in Iran is not only blocking oil tankers through the Strait of Hormuz, it is also holding up much of the world's fertilizer supply, a development that is drawing close attention from farmers preparing for spring planting.

"We get very excited when springtime rolls around," said Dan Glessing, president of the Minnesota Farm Bureau.

With bags of seed corn lined up behind him on his Wright County farm, Glessing said winter can feel long as he waits to get into the field, and he is watching global events with growing concern.

"If you don't have that fertilizer to get that genetic potential out of the seed, you've got a lot of expensive equipment for not a lot of crop," he said.

Glessing described fertilizer as food for crops, and said the current hold on shipments through the Strait of Hormuz, which he called essentially blocked because of the Iran war, has added uncertainty to a market that is global in scope.

"We don't necessarily see a lot of it here. But having said that, we are in a global supply," he said. "It's a global market, and you really feel the effects of that fertilizer not moving."

Many Minnesota farmers obtain fertilizer from Canada rather than the Middle East, Glessing said, which has helped blunt immediate local exposure. Still, he noted that some markets have already seen dramatic price movement, with spikes as high as 70% in the past month.

In Minnesota, a number of farmers locked in lower spring fertilizer prices months ago, when the market was more stable; those who did not are left to wait and see how long the disruption will last.

The best-case scenario for Glessing is for the Strait of Hormuz to open back up as soon as possible.

"If we can get the products moving, it would have a minimal impact on the price of fertilizer for this spring. But the longer we go on the more we are going to have an effect on the price," Glessing said.

At this point, Glessing said he does not anticipate a fertilizer shortage leading to a food shortage or to higher food costs for consumers. Farmers, he added, are monitoring both supply chains and markets as they make planting and input decisions for the season.