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The fertilizer crisis sparked by the virtual closure of the Strait of Hormuz is getting growing attention, as warnings intensify over the long-run potential hit to global food production.
Fertilizer analysts at Scotiabank said in a Sunday note to clients that demand destruction for fertilizer is under way in response to soaring prices and curtailed product availability.
They offered the rundown below of the “irreversible cyclical damage” they expect to see as a result:
- Australia is now going to plant less wheat than expected due to a lack of fertilizer and diesel fuel. Not helping the situation is soaring freight rates, which will impact the region more than others. This has sent Aussie wheat prices to multi-year highs.
- Brazil soybean farmers are facing a further squeeze on margins that are already at their weakest in at least a decade. According to Agroconsult, this could keep planted area flat in ‘26/27. The issues? In addition to tight credit availability and of course high interest rates, now farmers will have to contend with uncertainty on costs related to fertilizers, fuel, and global freight rates. For context, farmers that lease land were already in negative margin territory, according to The Agribiz. Growers are delaying planting decisions, which could also impact yield.
- China is easing inspection requirements on imported grains and oilseeds. For example, China will now abandon its zero-tolerance policy for the presence of weed seeds in Brazilian shipments.
- Ethiopia receives 90% of its N fertilizer from the Gulf region. Simply put, it’s not showing up, with the planting window starting right now for long-cycle crops.
- India has already seen Yara shut down nitrogen production, due to reduced gas availability. Consider that India uses about 40M mt of urea annually, and had 6.2M mt of channel inventory on March 19. Fertilizer plants are only getting about 70% of their gas needs, and so this will likely become an issue for India later in the year.
And then there’s the U.S., with USDA set Tuesday to release its Prospective Plantings report. The sharp rise in nitrogen prices has sparked expectations producers will pull back more than initially thought from 2025’s nearly 99 million acres in corn plantings.
A Dow Jones survey pegs corn at 94.4 million acres, but our own Pro Farmer/Doane survey suggests corn could be stickier than expected at 96 million acres—though that’s still down 2.7 million from last year.
Brazil corn, soy estimates unchanged: Pro Farmer crop consultant Dr. Michael Cordonnier on Monday left his Brazil soybean crop estimate unchanged at 178 million tons, with a neutral bias. Light and scattered showers occurred over the weekend across parts of central Brazil with dry weather prevailing across most regions, he said, noting that dry weather remains a concern especially in southern Sao Paulo and central Parana. Rainfall is expected to increase in these areas this week, bringing temporary relief.
He left his corn estimate at 132 million tons, with a neutral to lower bias. Safrinha, or second-crop, corn planting in Brazil was 99% complete with the state of Parana being the only state where planting continues according to AgRural. Weather during April will be critical for the safrinha corn in the southern production areas (approximately 40% of the total planted area), especially Parana, Sao Paulo, and southern Mato Grosso do Sul, Cordonnier said.
Cordonnier left his Argentina soybean estimate unchanged at 47.0 million tons and his corn estimate unchanged at 53 million tons. Weather in Argentina continues to improve with more frequent showers, especially in previously dry areas such as central and southeastern Buenos Aires, he said. Cordonnier noted that weekend rain was heaviest in central Buenos Aires with localized amounts of as much as 100 mm (4 inches). Rainfall this week should favor southern Argentina and Buenos Aires once again, he said, with recent rains helping to improve the condition of the later developing corn.
$100 U.S. crude, nearly $4 gasoline: West Texas Intermediate crude rose $3.24 a barrel Monday to close at $102.88, the close above $100 since 2022 in the wake of Russia’s invasion of Ukraine. It’s a sign that traders don’t see a quick end to the war with Iran, which has sharply curtailed crude flows out of the region.
- Meanwhile, the average U.S. price for gasoline stood at $3.99 a gallon on Monday, according to AAA, up from $2.982 a gallon a month ago. The average diesel price stood at 5.416, up from $3.758 a month ago.
Falling farm numbers: The number of U.S. farms fell by almost 150,000 in the last five years, and total farmland area dropped by more than 21 million acres nationally, Politico reported Monday, citing its own analysis of USDA data.
Farm numbers dropped three times as fast as farmland area did, the report said, showing there was significantly less farmland loss compared with the number of farms that closed. The development suggests smaller farms are consolidating or being absorbed into bigger ones. Politico said the trend was noticeable in 42 states, including Texas, Montana and Kansas, which had among the most farmland acres in 2025. Montana, for instance, had 14 percent fewer farms in 2025 compared with 2021, but the state only lost around 1 percent of its farmland.
- Chapter 12 bankruptcy filings, the pathway for family farmers and fishers, increased by 46 percent in 2025 from a year earlier, with the Southeast and Midwest hit hardest, Politico said.
Earlier on Pro Farmer: Number of U.S. farms continues slow decline
Argentina E15: Argentina’s government on Friday said it would let local firms voluntarily blend up to 15% ethanol into gasoline, Reuters reported, in an effort to blunt the impact from higher oil prices on local fuel costs.
“The measure aims to give the industry greater flexibility and to cushion any potential increases in pump fuel prices, protecting consumers,” the Energy Secretariat said in a statement.
The report noted that gasoline prices in Argentina country rose more than 18% in March, driven by the U.S.-Israel war with Iran and has climbed more than 60% year‑on‑year. Argentina’s Energy Secretariat, which reports to the Ministry of Economy, increased the maximum permitted oxygen content in fuel to 5.6%, giving refiners flexibility to add more ethanol and use less gasoline in their fuel blends to help reduce overall costs. It said that the resolution does not impose new requirements on refiners or modify the mandatory bioethanol blend.
Re-routing exports: Brazilian beef and chicken exporters anticipate only limited disruption from the Iran war, despite the near-closure of the Strait of Hormuz forcing companies to reroute shipments and absorb higher costs to keep supplies moving, Reuters reported.
The report noted that the conflict has raised risks for two of Brazil’s biggest meat export businesses, especially poultry, which has heavy exposure to the Middle East. But exporters said they were finding alternative sea and land routes to serve buyers in the region, while strong demand elsewhere was helping cushion the blow to the beef trade.
- Industry group ABPA President Ricardo Santin told Reuters that March chicken exports were on track to exceed the 476,000 metric tons shipped in the same month last year.
- Beef industry group Abrafrigo said Brazil has been redirecting shipments to markets including the U.S., the European Union, Chile and Russia, while tighter global cattle supplies were also supporting demand.
Listen to this week’s Pro Farmer Podcast for what to expect from Tuesday’s eagerly awaited USDA Prospective Plantings and Quarterly Grain Stocks reports.