Global Conflict and Fertilizer Supply Chains: An American Opportunity

 

Global Conflict and Fertilizer Supply Chains

An American Opportunity

Global events are once again reminding us how fragile our agricultural system can be. The conflict involving Iran and instability around the Strait of Hormuz has created major supply chain issues around the world, and agricultural products are no exception. Fertilizer, fuel, and key inputs move through that region. Farmers are unsure about whether or not they can afford fertilizers, and companies are questioning procurement at current prices. When this situation gets resolved, these issues aren't going to simply be fixed overnight. Supply chain issues are slow to resolve, and often leave behind lingering market impacts.

We’re already seeing pressure on margins, and have been for several years. Purdue’s 2026 crop budgets showed negative returns across major commodities under earlier assumptions. Markets have improved some since then, especially soybeans. However, we have to account for: 1) China's decreasing swine herd and South American soybean sourcing, 2) the likelihood of farmers decreasing needs for nitrogen inputs by shifting production to more soybeans (creating even greater surplus), and 3) the current supply chain fragility. Soybeans are not a sustainable answer.

The United States has the capability to produce nitrogen domestically through the Haber-Bosch process. We can also be self-sufficient on other nitrogen sources, but the economics of doing so leave much to be desired on returns. That said, we have a strong opportunity to transition into more regenerative practices and improve long-term soil health while also providing competitive returns for farmers.  Compost contributes key nutrients like phosphorus, potassium, and micronutrients while improving soil structure and water retention. At the same time, biological systems—beneficial microbes and fungi—can increase nutrient availability already present in the soil. Supplement this approach with domestic nitrogen production, and we have a more stable and sustainable system.

In fact, biological approaches can help unlock tied-up nutrients and improve efficiency while reducing synthetic fertilizer needs. Some systems are already demonstrating the ability to replace a portion of nitrogen and phosphorus inputs while maintaining performance. Others show measurable improvements in soil function and nutrient availability through increased microbial activity. This is where newer biological tools are worth paying attention to. Products that activate native soil microbes and expand root access to nutrients are beginning to show that we can get more out of the soil we already have. These approaches likely won't eliminate fertilizer; however, they can reduce dependence and stabilize our systems long-term.

If you are evaluating these approaches in your own operation, I am glad to help. I have recommended products (some sponsored, some not) and practical approaches. We can keep reacting to global volatility or we can start designing systems that don’t depend on it. The difference will define who stays profitable and who doesn’t.

Photo by: Grispb, Adobe Stock