Fertilizer prices could remain elevated into spring 2027, even if geopolitical tensions ease and shipping through the Strait of Hormuz returns to normal.
Josh Linville, vice president of fertilizer at StoneX Group, says the disruptions have already caused too much damage to global fertilizer supply chains for markets to recover quickly.
“Even if we solve the Strait of Hormuz right now and everything went back to normal — vessel traffic, peace, all those fun things — I think we’re still talking about this in spring 2027,” Linville says. “I don’t think farmers are getting out of this.”
Fertilizer costs are already climbing as farmers prepare for the 2027 growing season. University of Illinois researchers report that diammonium phosphate (DAP) prices have risen from about $700 per ton early in 2026 to around $850 per ton, while sulfur prices have surged more than 130% since the beginning of the year. Researchers warn continued sulfur supply disruptions could push phosphate fertilizer costs higher
While easing tensions could help bring some prices down, Linville says a return to previous price levels is unlikely in the near term.
“Could it reprieve some of these high prices? Yes. Is it going to solve it back to what we thought was normal? Absolutely not,” he says. “We’ve done too much damage for too long. You don’t undo that kind of damage overnight.”
Anhydrous Ammonia Supplies Tighten Ahead of 2027
For farmers preparing for the 2027 growing season, the outlook remains complicated. Global trade disruptions are colliding with tight inventories, stronger nitrogen demand and uncertainty surrounding key fertilizer inputs. And at fall, anhydrous ammonia is a growing concern.
Linville says inventories were already tight as the summer fill season began, leaving manufacturers with limited supplies to offer customers.
“We started July 1 at about as low as we can remember in recent times. That’s bad. It was bad enough that one of the manufacturers, when they came out with their programs, didn’t even have a summer fill. That tells you they only had enough to fill their own system,” Linville says.
Now, the supply picture is becoming more challenging as demand builds for the next growing season.
Linville points to improving new-crop corn prices as one factor that could encourage farmers to plant more corn in 2027. Compared with lower price levels earlier in the market cycle, stronger corn prices may improve the incentive to plant additional acres , and those acres will require nitrogen.
“That’s why we’re seeing products so tight. That’s why we’re seeing prices so high,” Linville says.
The underlying issue comes down to supply and demand. Available fertilizer supplies are limited, while anticipated demand is increasing.
“The manufacturers are saying, listen, the supply and demand is out of balance,” Linville says. “Everything goes back to Econ 101, guys. Supply, demand. Supplies are too tight. Demand is too high. You can’t fix supply. You destroy demand with higher prices.”
With production and supply difficult to increase quickly, higher prices become one way the market attempts to bring demand back into balance.
“You can’t fix supply. You destroy demand with higher prices,” he says.
For farmers, that creates a difficult calculation heading into 2027: Fertilizer costs are elevated, but reducing nitrogen applications or changing crop plans can have implications for yield potential and overall profitability.
Canadian Potash Supply Creates Tariff Risk
Beyond nitrogen, Linville says potash supplies remain vulnerable to trade tensions between the U.S. and Canada.
The U.S. relies heavily on Canadian potash, with Linville estimating that Canada accounts for about 90% of U.S. potash imports. Any disruption to that relationship could have significant implications for domestic fertilizer availability and prices.
Recent tariff discussions add another layer of uncertainty for farmers trying to plan input purchases.
“Canada knows how reliant we are on their product,” Linville says. “Whether we like to admit it or not on either side of the border, we’re married to each other.”
He says both countries have a strong incentive to maintain fertilizer trade, even as political and trade tensions continue.
“We might be having a little bit of a tiff. We may not be eating dinner together, but we better get this figured out for the sake of both sides,” he says.
With limited domestic potash production and substantial reliance on Canadian imports, the trade relationship remains an important factor to watch as farmers make decisions for the coming season.
Sulfur Shortages Add Pressure to Phosphate Markets
Phosphate fertilizer faces a different challenge: disruptions to global sulfur supplies have been a more silent threat to the global fertilizer supplies, but one that is having major impacts.
Linville says the Strait of Hormuz is a critical passageway for global sulfur shipments, while Russian supply disruptions have added to the strain. Together, those issues are limiting access to a key input used in phosphate fertilizer production.
He estimates that roughly half of the world’s sulfur supply moves through the Strait of Hormuz, with Russia accounting for another 17% of global supply. Those disruptions threaten the availability of an important raw material for fertilizer manufacturers.
Sulfur is one of the major input costs for phosphate production, meaning supply shortages can affect production even if phosphate prices soften.
That creates a difficult dynamic for the market. Farmers facing high fertilizer prices may consider reducing phosphate applications or delaying purchases. But lower demand and falling prices do not necessarily translate into increased availability.
“Even if we were to drop the price of phosphate and farmers say, ‘Nope, I’m not going to use it. We’ll just skip it, we’ll wait, we will reduce,’ the market is saying, ‘Fine, drop the price. I’ll just shut down more production,’” Linville says.
From Higher Prices to an Actual Sulfur Shortage
Mosaic Company’s Ben Pratt recently told Farm Journal sulfur prices have blown past anything he’s seen in his career, as the shortage continues to grip the fertilizer market.
“I’ve been at Mosaic 15 years, and in all that time, sulfur has typically traded somewhere between $100 and $300 a ton,” says Pratt, vice president of public affairs. “At this moment, because of the closure of the Strait of Hormuz and other conflicts rattling the world, sulfur prices are well north of $1,000 a ton. They’ve multiplied fivefold.”
Sulfur is the raw material that makes phosphate fertilizer possible. Pratt says every ton of phosphate Mosaic produces requires four-tenths of a ton of sulfur.
“So if we don’t have sulfur, we can’t make phosphate fertilizer, period,” Pratt says.
Is this just a price problem, or could farmers be looking at an outright phosphate shortage? Pratt says due to the lack of sulphur available today, phosphate production has been severely slashed.
“Let’s just talk numbers for one second,” Pratt says. “Typically, the global phosphate fertilizer market every year is 75 million tons. That’s how much phosphate fertilizer global farmers consume every year. Our best estimates are that producers around the world will probably make about 45 million tons this year, because they either can’t get or can’t afford sulfur. There is a looming crisis out there, and it’s not too far removed, it becomes a food crisis.”
Pratt says that means farmers should not just brace for higher phosphate fertilizer prices in the months ahead, but also the possibility that some areas may see a shortage.
“They could be looking at higher fertilizer prices, or they could be not able to find it at all,” Pratt says. “If we’re not able to produce phosphate fertilizers here, and our big competitors in other parts of the world are either slowed down or not producing, that’s a pretty dire situation.”
China Could Provide Some Relief for Urea Markets
One potential bright spot for fertilizer markets is China, which is allowing more urea exports after restricting shipments in recent years.
Linville says China typically exports about 5 million to 5.5 million metric tons of urea annually to global markets. However, the country has held back supplies in recent years, limiting the amount available to international buyers.
That appears to be changing.
“If they were to export all the tons that we think they’ve approved, it could be upwards of 8 million, 9 million, 10 million tons,” Linville says.
While much of that additional supply is expected to be prilled urea — a form that is not widely used in the U.S. — the added volume could still influence global fertilizer prices.
Urea is a key nitrogen fertilizer, and changes in global availability can affect the broader supply-and-demand balance, even when the product is not shipped directly to U.S. buyers.
“That is one of the good, positive things that we have in the fertilizer markets right now,” Linville says.
Still, increased Chinese exports may offer only partial relief as farmers contend with tightening supplies of other nitrogen products, particularly anhydrous ammonia.
What Farmers Need to Watch Heading Into 2027
The fertilizer outlook remains tied to several moving pieces: shipping through the Strait of Hormuz, China’s urea exports, North American nitrogen inventories, U.S.-Canada trade policy and the availability of sulfur for phosphate production.
While additional Chinese urea exports could provide some relief, Linville’s broader message is that fertilizer markets will not quickly return to normal, even if geopolitical tensions ease.
For farmers, that means input costs could remain a significant consideration as they finalize crop budgets and make fertilizer purchasing decisions for 2027.
And it’s not just high fertilizer prices. Diesel costs are adding to that pressure, with the International Energy Agency warning that the global diesel squeeze could last well into 2027 as the Iran war disrupts supplies.
Global diesel exports fell by 700,000 barrels per day in September compared with a year ago, and the agency says rebuilding depleted inventories may not begin until the second half of 2027.