The Trump administration temporarily suspended countervailing duties on certain phosphate imports on Friday. This action follows the closure of the Strait of Hormuz in February 2026, which disrupted global fertilizer shipments and natural gas supplies.

Fertilizer shipments from the Persian Gulf slumped and prices rose after the strait closed. The war created a global shortage of natural gas, a key component in nitrogen fertilizer manufacturing. Iran closed the Strait of Hormuz shortly after it was attacked by the U.S. and Israel at the end of February.

Around one-third of the world's fertilizer transported by sea passed through the Strait of Hormuz before the war began, according to UN Trade and Development. About one-third of the fertilizer used by U.S. farmers is imported. "Even if those tons from the Mideast aren't coming to the US, they are still tons that have been removed from the market and need to be made up elsewhere," said Christopher Glen, Vice President of Public Affairs at The Fertilizer Institute.

A survey by the American Farm Bureau Federation released in April reported that 70% of respondents said they could not afford all the fertilizer needed for the season. In 2024, U.S. farms spent approximately 7% of their budgets on fertilizer, lime, and soil conditioners. Producers of corn and wheat can spend around a third of their operating costs on fertilizer.

Half of the farmers who responded to a National Corn Growers Association survey released in early April said they would not apply the full amount of fertilizer to their corn crop this year. Chris Barrett, a professor of agricultural economics at Cornell University, said in a podcast interview that consumers are going to see higher food prices come September to January, once harvests start coming in, and the few months thereafter. He also stated, "Very little of that is going to be directly attributable to fertilizer."

Some fertilizer prices have started to fall in recent weeks after the U.S. and Iran reached a deal to reopen the Strait of Hormuz last month. Rob Vos, a senior research fellow at the International Food Policy Research Institute, estimated that it could take weeks or months for fertilizer manufacturing plants to return to previous production levels. Vos also remarked, "Those buyers will go to other farmers to try and get it cheaper."

Why It Matters

The temporary suspension of duties responds to a recent fertilizer supply crisis that impacted global markets and is affecting agricultural producers. The closure of the Strait of Hormuz, a key shipping route for one-third of the world's seaborne fertilizer, led to increased prices and shortages. While some prices have begun to decline following an agreement to reopen the strait, the disruption created concerns about future food costs and agricultural production.

U.S. farmers, who import about one-third of their fertilizer, have reported difficulties affording necessary supplies, with some planning to reduce fertilizer application. This situation indicates potential impacts on crop yields and consumer food prices, as estimated by various analyses, including a TD Economics analysis suggesting a North American production shortfall could increase food inflation in 2027.