By Henrique Monaco and Gary Schnitkey et.al
Latest developments in the Middle East, including the Strait of Hormuz closure, have repercussions on energy, fertilizers, and commodity markets (see farmdoc daily, March 23, 2026; March 24, 2026, and March 27, 2026). Fertilizer prices have soared well above historical averages. For U.S. farmers, these price movements, along with supply risks, could have large impacts on the 2027 crop year, especially if conflict persists through fall fertilizer purchase decisions. For Brazilian farmers, the impact on the 2026/27 crop will be felt sooner as planting the first crop will begin in September and usual soybean fertilizer decisions are happening now. Moreover, Brazil has a higher exposure to fertilizer imports than does the U.S. Hence, the conflict could impact fertilizer purchase decisions, and ultimately Brazil’s soybean global competitiveness.
Background on the Conflict
On February 28, the United States and Israel launched military strikes against Iran, triggering an escalation that has since disrupted global commodities and input markets. The Middle East is both a major production hub and critical logistics channel for fertilizers (see farmdoc daily, March 23, 2026 and March 27, 2026). As a result of the conflict, the Strait of Hormuz, which is responsible for moving roughly one-third of seaborne traded fertilizer, has often been closed while negotiations happen.
As of April 10, tentative signs of de-escalation between the U.S. and Iran briefly improved financial market sentiment, but conditions in the Strait of Hormuz remain disrupted. As a result, concerns over global fertilizer and oil supply disruptions, along with elevated prices, continue to weigh on cropping decisions in both the U.S. and Brazil.
Brazil and U.S. Exposure to Fertilizer Supply Shocks
Despite both being major fertilizer consumers (see farmdoc daily July 29, 2025), Brazil and the U.S. face different exposure to global markets. In Mato Grosso (Brazilian Center-West), soybeans are typically planted in the Southern Hemisphere spring (October-November) and harvested in the Southern Hemisphere summer (January-March). A second corn crop (known as “safrinha”) follows, where planting occurs with or right after soy harvesting. Corn is then harvested in June-July. This translates into different fertilizer decision windows. While in the U.S. Midwest, the bulk of fertilizer pricing usually happens during the fall to early spring, decisions for Brazilian farmers are usually concentrated from February to May for soybeans and July-November for corn.
Soybeans’ main applied crop nutrients are phosphate and potash, while corn is the main consumer of nitrogen. In general, Brazil is much more dependent on imports. The share of consumption met by imports of Nitrogen, Phosphate, and Potash (NPK) between 2020 and 2023 was about 90%, reaching about 99% in 2023 (Pereira and Cardoso, 2025).
The U.S. has a greater nitrogen production capacity domestically (see farmdoc daily, July 29, 2025), which decreases risks for nutrient shortages, although prices are still impacted. For nitrogen, Brazil relies on urea as the main nitrogen fertilizer, primarily from Russia and China, while the U.S. has a more mixed profile.
Similar to nitrogen, phosphate fertilizers production in the United States is largely domestic. Net import reliance for phosphate rock – the key mineral in phosphate fertilizers – reached 13% in 2024 (see farmdoc daily, July 29, 2025). Still, imports are important to the U.S. market, and nearly all phosphate rock imports are from Peru. Despite low reliance on phosphate rock, the U.S. imports about one-third of finished phosphate products – half of that from Saudi Arabia (see farmdoc daily, March 23, 2026). Brazil relies on imports mainly from Morocco and Russia.
For potash, both Brazil and the U.S. rely heavily on imports. Nevertheless, U.S. potash comes primarily from Canada, while Brazil also relies on Russia and Belarus, regions that were not materially affected by the recent conflict, though existing sanctions still pose risks.
Source : illinois.edu