Urea prices have spiked since the conflict in Iran started
The American Farm Bureau Federation is urging President Trump to act to ensure farmers have access to important fertilizers.
“Farmers nationwide respectfully urge you to use your authority to take proactive steps to safeguard fertilizer supply chains and reduce the risk of market disruptions that could threaten American agriculture,” Farm Bureau President Zippy Duvall said in a March 9 letter addressed to the president.
Since the conflict in Iran started, shipments through the Strait of Hormuz, a critical shipping lane situated between Iran, Qatar, Oman, and the United Arab Emirates which handles about 35 percent of global fertilizer, including 50 percent of the world’s urea, has come to a halt.
The Wall Street Journal, for example, estimates 3,000 ships are waiting to pass through the strait.
And following through earlier threats, Iran has attacked vessels trying to navigate the waterway.
The conflict and associated supply chain disruptions have caused fertilizer prices to spike.
Urea prices, for example, have gone up from $444 per ton on February 13 to $590 per ton on March 3, Barchart figures show.
The Farm Bureau provided seven recommendations for President Trump to consider to secure access to fertilizer for U.S. farmers.
One is to utilize the U.S. Navy to provide escorts for fertilizer shipments through the Strait of Hormuz.
But the Navy has declined requests from the shipping industry for escorts due to the potential risks involved, Reuters reported.
The Farm Bureau also suggested the U.S. government provide insurance for ships carrying fertilizer.
That is underway as the U.S. government launched a $20 billion program through the International Development Finance Corporation.
In addition, the Farm Bureau is asking for a waiver of the Jones Act.
This piece of legislation dictates that goods being transported by water between U.S. ports are done on U.S. owned, manned, built, and flagged ships.
The Farm Bureau is urging President Trump to act quickly on these requests.
If access to fertilizer can’t be secured, farmers face financial hardships not seen in years.
“We are deeply concerned that failure to act could lead to disruptions to the food supply chain not seen since 2022 when food price inflation reached 40- year highs,” Duvall wrote in his letter.
That year, urea prices went higher than $1,000 per ton in some markets.