Oil prices aren’t the only commodity being felt because of the military strikes on Iran by the U.S., Israel and Middle Eastern allies.
Oil prices soared this week to $119 a barrel and by late Wednesday had settled into the upper $80s for West Texas Intermediate and lower $90 for Brent crude. But ask Oklahoma farmers what they might be feeling and seeing and it is the cost of the fertilizer they apply to their croplands.
The closure of the Strait of Hormuz is also sending up fertilizer prices and Successful Farming reports the high-low spread before the start of the war was $460 to $480 per short ton. Within a week, prices had jumped to a spread of $520 to $620 per short ton.
“Obviously, that shows a significant jump, but also that’s a huge spread over the course of a week to see that level of uncertainty in the trade, as far as how much product is going to be coming in,” said Veronica Nigh, chief economist with The Fertilizer Institute (TFI) as reported by the farm magazine.
Successful Farming said it comes at a critical time because farmers need access to nitrogen fertilizer for their corn, cotton and spring wheat plantings. The added farming pressure comes as the U.S. relies on imported fertilizer, including an estimated 25 million tons in 2025. Nearly one-fourth of the imports happen in March and April.
Another part of the fertilizer story is whether some U.S. fertilizer producers have violated antitrust laws. An investigation is reported to be under way by the Department of Justice.