War-driven disruption reshapes global fertilizer markets and margins
Middle East conflict drives nitrogen prices higher, lifting fertilizer profits while increasing cost pressure across global agriculture markets.
n May 2026, leading global fertilizer companies reported strong earnings growth driven by surging nitrogen prices, as the Middle East conflict disrupted supply chains and added new pressure to global agricultural costs.
The crisis - intensified by disruptions in the strategic Strait of Hormuz - once again exposed the fragility of the global nitrogen supply chain, a critical input for major crops such as corn and soybeans across the United States and Latin America.
Companies including CF Industries and Nutrien posted nearly 20% increases in quarterly sales, benefiting from higher global fertilizer prices. CF more than doubled its earnings per share compared to the previous year, while Nutrien reported a more than fourfold increase, though slightly below market expectations.
Prices had already been elevated due to a tight supply-demand balance, but the conflict accelerated the trend. Granular urea prices in the U.S. Gulf rose about 36% since February, while prices in Egypt surged by more than 70%, highlighting the global nature of the shock.
Meanwhile, natural gas prices - a key input in ammonia production - did not rise as sharply in the U.S. compared to other regions, allowing North American producers to expand margins and strengthen their competitive position.
However, while companies benefit, farmers face mounting challenges. Producers are under increasing financial pressure, dealing with high input costs, weaker crop prices, and growing uncertainty across markets.
The situation has also triggered regulatory scrutiny. The U.S. Department of Justice is investigating potential price collusion among fertilizer producers in a highly concentrated market. Although no formal charges have been filed, the probe reflects rising political concerns over agricultural input inflation.
Market analysts note that the Iran conflict represents the third major supply and demand shock in the nitrogen market in the past six years, following the pandemic and the war in Ukraine - reinforcing concerns about systemic vulnerability.
Despite strong corporate performance, farmer sentiment remains weak. Surveys suggest that nearly two-thirds of producers expect lower net farm income in 2026, which could impact future fertilizer demand.
As the planting season progresses, uncertainty continues to dominate. Nitrogen remains an essential input, limiting the ability of farmers to reduce usage, even as some delay purchases in hopes of more favorable conditions.
