U.S. farmers are bracing for a system shock resulting from disruptions to shipping through the Strait of Hormuz and the impact on fertilizer availability and prices. American Farm Bureau Federation President Zippy Duvall today urged President Trump to intervene in a letter that lays out several recommendations.
The letter states global fertilizer markets are highly vulnerable to disruptions in maritime transit routes, especially through the Strait of Hormuz, a critical shipping corridor for key fertilizer materials and finished fertilizer. Recent energy production halts in the Middle East will affect the price and availability of many downstream products farmers depend upon. These supply chain shocks are expected to drive already record-high input prices even higher at a time when farm margins are extremely tight and many farmers are underwater.
An analysis by American Farm Bureau economists reveals the seriousness of the situation. Large volumes of urea, ammonia, phosphates, sulfur and petroleum produced in Gulf countries move through the Strait of Hormuz. Countries exposed to disruption in the region account for nearly 49 percent of global urea exports and about 30 percent of global ammonia exports, reflecting the concentration of fertilizer production and export capacity in and near the Persian Gulf.
The letter warns that without strategically prioritizing the delivery of critical farm inputs such as urea, ammonia, nitrogen, phosphate and sulfur-based products, the U.S. risks a shortfall in crops, threatening food security and national security while contributing to inflationary pressures.
The letter lists seven recommendations, ranging from utilizing the U.S. Navy to provide safe transit for fertilizer shipments to leveraging federal tools to address insurance or financing barriers for vessels transporting fertilizer cargo.
