URBANA, Ill. – 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. According to analyses by university agricultural economists, the closure of the Strait of Hormuz – which, at press time, was reportedly under the control of U.S. warships – will result in differing exposure and implications for each nation in relation to the upcoming 2026-27 crop year.

“U.S. farmers face lower overall supply risk than Brazilian farmers,” according to an April 10 article credited to five University of Illinois and one Purdue University agricultural economists. “The U.S. sources a larger share of fertilizer domestically (nitrogen and phosphate) and nearby partners for potash (Canada), limiting exposure to Middle East disruptions. Moreover, much of the fertilizer for the 2026 crop was already purchased and/or applied last fall, before the conflict began.

“For the remaining spring fertilizer needs, application rates can also be adjusted. For nitrogen, optimal application rates suggest that a slight reduction in quantity applied is an option. For potassium and phosphorus, soil testing can identify fields where reducing application rates won’t result in near-term yield loss. Input decisions for the 2027 crop are still a few months away, providing U.S. farmers with greater flexibility to monitor how markets evolve before committing expenditures.”

It’s the war’s effect on fertilizer purchases for the 2027 cropping season that has most farmers worried. The economists noted that for Brazilian farmers, the impact from their fertilizer decisions on the 2026-27 crop will be felt sooner than in the U.S. Planting of Brazil’s first crop will begin in September, but their soybean fertilizer decisions are being made now. Because Brazil has a higher exposure to fertilizer imports than does the U.S., the conflict could not only impact fertilizer purchase decisions, but ultimately Brazil’s soybean global competitiveness.

“Despite both being major fertilizer consumers, 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,” said the economists, explaining that 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.”

Brazil’s share of consumption met by imports of nitrogen, phosphate and potash (NPK) between 2020 and 2023 was about 90 percent, peaking at about 99 percent in 2023, according to author research. In addition, the U.S. has a greater nitrogen production capacity domestically. 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, stated study authors Henrique Monaco, Gary W. Schnitkey, Nick Paulson, Andre Vieira Lobo and Joao Arromatte, all of the University of Illinois Department of Agricultural and Consumer Economics, and Joana Colussi, Center for Commercial Agriculture, Purdue University, in their farmdocDAILY article “The Iran Conflict and Fertilizer Markets: Why Brazil Faces Greater Near-Term Risk than the U.S.”

Certain major crop producing countries appear significantly less exposed to direct Gulf supply losses. According to Global Agriculture, an independent international media platform covering agri-business, policy, technology and sustainability, Egypt sources only 6.4 percent of its fertilizer imports from the Gulf, while China’s share is 9.1 percent.

The news source reported on April 15 that the conflict in the Gulf region is rapidly emerging as a major risk for global agriculture, with fertilizer supply disruptions now adding pressure to already fragile food systems. “While energy markets often dominate attention during geopolitical crises, the effect on fertilizer trade may prove just as significant for farmers, governments and consumers in 2026…the collapse in Gulf exports of oil, gas and fertilizers is already creating shortages and higher costs in countries that depend on the region for essential agricultural inputs. At the same time, nations economically linked to Gulf markets through food exports or labor flows are facing secondary economic stress,” Global Agriculture found.

The April 3 USDA Production Cost Report showed anhydrous ammonia prices averaging $1,099.50 per ton ($990-$1,250) in Illinois, an increase of $101.17 per ton over the previous bi-weekly report. Potash averaged $502.50 per ton and urea was selling at around $852.50 per ton in Illinois, according to the report.