Breaking Down the April 2026 NDSU Agricultural Trade Monitor: Fertilizer Price Projections Under Strait of Hormuz Disruption Scenarios

The April 2026 edition of the NDSU Agricultural Trade Monitor examines how ongoing disruptions in the Strait of Hormuz are expected to shape global fertilizer prices through 2027. Building on the initial shock analyzed in March, this report shifts the focus toward forward-looking projections, using a global economic model to evaluate how different reopening scenarios may unfold.

At its core, the analysis underscores a critical point: uncertainty surrounding the Strait’s reopening, combined with infrastructure damage and global supply chain constraints, could keep fertilizer markets under sustained pressure well beyond the immediate crisis.

From Disruption to Projection: Modeling the Fertilizer Market

To understand how this disruption translates into price movements, the report introduces a global fertilizer projection model. This framework integrates vessel traffic data, long-run trade relationships, and country-specific demand responses to simulate how supply shocks propagate through international markets.

Rather than predicting a single outcome, the model evaluates three plausible scenarios. A Quick Reopening assumes a relatively smooth and coordinated return to normal shipping conditions. The Contested Transit scenario, which serves as the central case, reflects a partial and uneven recovery. Finally, the Extended Conflict scenario captures the possibility of prolonged disruption and continued restrictions on maritime flows.

These scenarios provide a structured way to understand not only how high prices could rise, but also how long elevated conditions may persist.

Exhibit 1: Projected Effective Blockage in the Strait of Hormuz Under Three Scenarios (% of Gulf Trade Blocked)

Source: NDSU scenario assumptions informed by Bloomberg vessel traffic data, Polymarket/Kalshi, and Hapag‐Lloyd timelines.

How High Could Fertilizer Prices Go?

Across all scenarios, the model projects a significant increase in fertilizer prices. Under the central Contested Transit scenario, urea is expected to peak at around $784 per short ton, while DAP reaches approximately $866. In a more severe Extended Conflict scenario, urea prices could approach $1,000 per short ton, nearing historical highs.

Even under the most optimistic assumptions, prices remain well above pre-crisis levels. What distinguishes the 2026 shock from previous episodes is not just the magnitude of the increase, but its shape. Instead of a sharp spike followed by a rapid correction, the model projects a slower rise and a prolonged plateau, reflecting persistent constraints in the system.

Exhibit 2: NOLA Urea: NDSU Projections Under Three Scenarios

Why Prices Stay Elevated: Structural and Logistical Constraints

Even in a best-case scenario where the Strait of Hormuz reopens relatively quickly, fertilizer markets are unlikely to return to normal conditions in the short term. A series of structural and logistical bottlenecks continue to delay the full restoration of trade flows. These include the time-intensive process of mine clearance, delays in reinstating maritime insurance coverage, and the clearing of hundreds of vessels currently stranded in the region. At the same time, reported damage to key production infrastructure in the Gulf further constrains supply capacity.

Together, these factors create a structural floor under fertilizer prices. In other words, even as conditions improve, prices are expected to remain elevated, with a return to pre-crisis levels unlikely before 2028.

A Different Kind of Crisis Than 2022

While projected fertilizer prices may approach levels seen during the 2022 Russia–Ukraine crisis, the underlying dynamics are fundamentally different. In 2022, the disruption affected both sides of the agricultural market simultaneously: fertilizer supplies were constrained, but crop prices surged, providing farmers with higher revenues that partially offset rising input costs.

In contrast, the 2026 disruption is largely confined to the input side. Fertilizer prices are increasing, but crop prices remain relatively low and stable. This imbalance means that farmers are unable to offset higher input costs with stronger revenues, resulting in a significantly tighter margin environment.

The Affordability Problem: A Growing Squeeze on Farmers

This dynamic becomes even clearer when looking at affordability. The report highlights the urea-to-corn ratio as a key indicator of how burdensome fertilizer costs are for producers. Under the central scenario, this ratio is projected to rise well above historical norms, reaching levels that exceed those observed during the 2022 crisis.

What makes this particularly challenging is the absence of a revenue offset. With corn prices hovering around $4.40 to $4.60 per bushel, farmers must absorb the full increase in input costs. As a result, affordability conditions in 2026 are projected to be significantly tighter, even when absolute fertilizer prices are similar to or slightly below previous peaks.

Exhibit 3: Fertilizer Affordability Under Contested Transit Scenario: Bushels of Corn Per Short Ton of Fertilizer (2020 to 2028)

Timing Matters: Global Differences in Exposure

The impact of the disruption is not uniform across countries. Differences in purchasing calendars and policy environments play a critical role in shaping exposure.

The United States benefits from partial insulation due to domestic nitrogen production and the timing of its primary purchasing window, which occurs after prices begin to normalize under the central scenario. In contrast, Brazil faces greater vulnerability, as its peak import season aligns closely with the period of highest projected prices. Meanwhile, India’s fertilizer subsidy system dampens its demand response, limiting the extent to which its imports decline despite higher global prices.

These differences redistribute the burden of adjustment across regions, with more price-sensitive markets absorbing a larger share of the impact.

What Comes Next?

Looking ahead, the trajectory of fertilizer markets will depend on several key uncertainties. The durability of the current ceasefire, the pace of maritime normalization, and the extent of infrastructure damage in the Gulf will all play a decisive role in shaping outcomes.

For U.S. producers, the fall 2026 purchasing window represents a critical decision point. Developments over the summer months will provide important signals as to whether prices have already peaked or whether further increases are still ahead.

Read the full April 2026 NDSU Agricultural Trade Monitor:

For inquiries, contact:

Shawn Arita – shawn.arita@ndsu.edu

Ming Wang – ming.wang@ndsu.edu

Jiyeon Kim – jiyeon.kim@ndsu.edu

Rwit Chakravorty – rwit.chakravorty@ndsu.edu

Sandro Steinbach – sandro.steinbach@ndsu.edu