Urea traded at $847 a ton at NOLA in the first full week of April, up 48 percent from April 2025. Anhydrous ammonia at $1,088 a ton, up 40 percent year on year. UAN28 at $513, up 38 percent. UAN32 at $890, up 30 percent. DAP at $866, up 12 percent; MAP at $922, also up 12 percent; potash at $489, up 5 percent. [1] These are the DTN survey numbers for April 6 through April 11. They are the dry and liquid fertilizer inputs American farmers were buying — or not buying — during the two weeks that straddled spring planting. Every number rose faster than the twelve-month moving average. The spike is not a commodity cycle. It is the Strait of Hormuz.

The paper's April 18 lead on the bank-war-equity gap argued that the war's second-order effects were what the markets and the regulators were hedging against. Today's drought piece by Dara Osei reports the climate and hydrology side of this question — the Palmer Drought Severity Index is the driest since 1895, 61 percent of the Lower 48 is in drought, vapor pressure deficit is 77 percent above normal. This piece is the supply-chain downstream of both. One system. Two shocks. Same aisle.

Hormuz is a fertilizer choke point

The Strait of Hormuz carries approximately 43 percent of seaborne urea exports globally, approximately 44 percent of seaborne sulfur, over a quarter of traded ammonia, and significant phosphate volumes from Saudi Arabia. [2] When the strait closed on February 28, the global fertilizer market lost its highest-capacity corridor, immediately. The North Dakota State University report published April 14 modeled three scenarios: quick reopening, contested transit, and extended conflict. Even under the most optimistic "quick reopening" scenario, fall 2026 prepay urea is projected to average $636 per short ton, or 35 percent above pre-crisis levels. Under the "contested transit" scenario, fall prepay urea reaches $733. [3] Pre-crisis urea, for comparison, was roughly $470. The NDSU report's long-run structural floor, given the infrastructure damage assessed in Iran and nearby Gulf facilities, is $532 — 13 percent above pre-crisis and unlikely to return to pre-crisis before 2028.

The closure has lasted seven weeks. Through Sunday morning, it has not opened. Iran said on Saturday that the strait would remain under "strict control" so long as the U.S. maintains its blockade of Iranian ports. [4] The IRGC's Saturday fire against Indian tankers has, in the markets' reading, pushed the timeline toward the contested-transit scenario. NDSU's pre-crisis model is now, in the April 18 market price action on urea-forward contracts, being revised upward by roughly ten percent.

What the American farmer cannot buy

The American Farm Bureau Federation released survey data on April 14. Of roughly 1,200 producers surveyed April 3 through April 11, 58 percent reported worsening financial conditions. Of Southern farmers — where pre-booking is uncommon — 78 percent said they could not afford all required fertilizer. Of Midwestern farmers, where pre-booking is more common, 48 percent said the same. Of rice, cotton and peanut producers, more than 80 percent could not afford the necessary inputs. [5] Sara Overman, a North Carolina farmer cited in CNBC's reporting, said her fertilizer and nitrogen costs jumped from $139 per acre last year to $217 this season. She had not pre-ordered because she could not afford to, and was hoping that prices would fall as planting began. Prices did not fall. They rose.

The USDA Economic Research Service had projected, in January, that fertilizer costs would average $166 per acre for corn in 2026, up 5.3 percent from 2025. [6] By April, the actual per-acre cost for corn producers who had not pre-booked was closer to $217. That is a 57 percent variance from the January projection, realized inside ten weeks. No line item in the farm economy moves like that except as a consequence of a supply shock. The shock is the strait.

Josh Linville, vice president of fertilizer at StoneX, put the calculation in the following form on April 10: "We have never, ever seen anything anywhere close to this magnitude of an issue with global fertilizer supplies." [7] Linville's most concrete concern — the one his April 14 interview with Red River Farm Network surfaced — is that India had a tender out for 2.5 million tons of urea during the week of April 14. Ships en route to U.S. ports could be rerouted to India if the Indian tender price cleared higher. U.S. farmers are competing, at the wholesale level, with a sovereign fertilizer buyer in the middle of its own crisis. The U.S. system is in "good shape, not great shape," per Linville's phrasing. Good can turn around very quickly.

The drought multiplies

The Palmer Drought Severity Index reading of April 14 is the tightest since 1895. Only July and August of 1934 — the Dust Bowl — were drier. [8] The drought affects planting decisions before fertilizer does. A Midwestern farmer, given expensive nitrogen and dry soil, will reduce planted acres, shift acres from corn to soybeans (soybean is a legume and sets its own nitrogen), or delay side-dress applications. These decisions are already being made. The National Corn Growers Association's recent surveys suggest that only about 60 percent of U.S. corn producers had pre-ordered fertilizer before the Iran conflict began. For the 40 percent that did not, the options this spring are: pay the price, plant fewer acres, plant different crops, or reduce fertilization per acre and accept lower yields.

All four responses reduce grain output on the 2026 harvest. Corn prices have not risen in the way fertilizer prices have — Linville's April 10 tweet noted corn up only $0.02 or 0.5 percent on the week. Farmers are paying input prices of 2026 and receiving crop prices of the 1970s, as Oklahoma farmer Tommy Salisbury phrased it. [9] The break-even arithmetic has inverted. Reduced corn output, compounded by reduced planting and reduced fertilization, will show up in grain supplies by late summer and in meat and dairy by Q4, with a lag of roughly two quarters in the consumer food-price index.

The waiver that does not help

Treasury extended the Russian oil waiver to May 16 on Friday. Diesel — the other major input for planting, transport and grain drying — is marginally insulated by the waiver extension. Iranian oil is not. The net effect is that the energy side of the farm cost structure has a thirty-day buffer the fertilizer side does not. Today's economy piece on the Treasury reversal notes that Indian refiners now depend on the same Russian waiver that keeps American diesel within tolerable ranges. The two markets are sharing a 48-hour policy half-life. So is the grocery aisle downstream.

The USDA Crop Progress report is due Monday evening. Analysts will read it for planting-progress data in the Midwest and the Plains. If planted acreage comes in below consensus, the revision to the 2026 corn and soybean yield forecasts begins Tuesday. If it comes in at consensus — because farmers planted the acres but reduced per-acre fertilization — the revision waits for mid-summer, when yield stress begins to show and the drought lags into it.

Either way, the grocery price point the American consumer will pay in Q4 is being set this week. It is being set by a closed strait in the Gulf of Oman, a Palmer Index reading from a monitoring station in Nebraska, and a 48-hour Treasury document that does not cover fertilizer. The aisle is the final ledger. Everything upstream is how it got filled.

-- DARA OSEI, London