Food prices could rise as Iran conflict disrupts fertilizer supply chain
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The Iran conflict is disrupting fertilizer shipments through the Strait of Hormuz, raising supply concerns and potentially increasing global food inflation.
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The war in Iran could raise global food prices as the conflict disrupts fertilizer shipments through one of the world's most critical trade routes. While energy markets have focused on oil supply risks, analysts say threats to fertilizer supply chains through the Straight of Hormuz may also bring long-term economic issues through food inflation. "Beyond energy, another risk receiving less attention is the potential knock-on effect on food prices, as fertilizer shortages push agricultural costs higher," said Wolfe Research chief economist Stephanie Roth in a note written on Tuesday. Roth estimates the disruption could raise "food-at-home" inflation by roughly 2 percentage points, adding about 0.15 percentage points to headline inflation in the U.S., on top of roughly 0.40 percentage point increase from energy. Those potential price hikes come as U.S. consumers face a sustained stretch of higher prices for food, housing and energy. Inflation for food at home climbed 2.4% year over year in February, the Bureau of Labor Statistics said Wednesday. Customers shop at Walmart on January 22, 2026 in Little Rock, Arkansas. Will Newton | Getty Images More than one-third of globally traded fertilizer passes through the Straight of Hormuz, making it a critical artery for agricultural supply chains. Commercial traffic through the route has largely been halted since the war started late last month, disrupting shipments just as farmers across the Northern Hemisphere prepare fields for spring planting. The timing is critical because fertilizers are applied early in the crop cycle and help determine yields later in the year. "If fertilizer supply tightens during this window, farmers may reduce application rates," Roth said in the note. That could reduce yields for crops like corn, soybeans, wheat and rice and increase agricultural costs. Economists in the fertilizer industry are equally concerned and say prices are already rising. Between the weeks ending Feb. 27 and March 6 — which ...
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