Fertilizer prices are up as much as 50% in some markets around the world due to ongoing disruptions from the war in Iran.
Commodities analysts say the dramatic rise in fertilizer costs are squeezing farmers as they prepare for the spring planting season.
The situation is likely to result in higher food prices for consumers and exacerbate food insecurity around the world over the next year, warn analysts.
Oxford Economics says that urea and ammonia prices, two key ingredients in farm fertilizer, have surged by 50% and 20%, respectively, since the Iran war began on Feb. 28.
Other fertilizers, such as potash and sulfur, have also risen dramatically over the past six weeks.
The Middle East is a particularly large exporter of urea and nitrogen products, and those shipments have been disrupted by the war between the U.S. Israel and Iran.
For farmers in the northern hemisphere who are preparing for the spring planting, the sharp rise in fertilizer costs adds to a litany of other issues.
In the U.S. and Canada, farmers are reeling from years of draught conditions, as well as an outbreak of avian flu and the impact of tariffs on their international shipments.
A total of 54 agricultural groups recently wrote to U.S. President Donald Trump to call for "much-needed market relief for America's farmers" amid surging fuel and fertilizer prices.
Fertilizer production is also being hurt due to a lack of storage options for products that cannot be shipped and a shutdown of some energy facilities in the Middle East.
In developing nations, the increase in fertilizer prices and accompanying rise in food costs is likely to worsen shortages and insecurity, warns the United Nations (U.N.).
While the U.S. and Iran have agreed to a two-week ceasefire, fertilizer and related products are not moving out of the Middle East as the Strait of Hormuz effectively remains closed.
Leading fertilizer producers include Nutrien (TSX: $NTR) and CF Industries (NYSE: $CF).
