Why Fertilizer Prices Are So High: Anhydrous Ammonia at $987 a Ton, the Strait of Hormuz, and USDA's $573 Million Plan
The Morning Harvest: Farm and Food News, No. 017, Saturday, October 24, 2026. Weekend deep dive.
Today in 30 seconds
Anhydrous ammonia, the cheapest form of nitrogen per pound, averaged $987 a ton the week of October 12, up 18 percent from $838 a year ago (DTN). Urea is $674 a ton, up 13 percent.
Fertilizer on a central Illinois corn acre went from about $190 to about $217 after the Middle East conflict began on February 28 (University of Illinois farmdoc daily).
Natural gas is more than 70 percent of the cost of making ammonia, and about 30 percent of the world's fertilizer shipments normally pass through the Strait of Hormuz, which has been severely constrained since late February.
Sulfur, needed to make phosphate fertilizer, has gone from a $100 to $300 a ton range to above $1,000 (Mosaic, via AgWeb).
USDA proposed $573 million on October 22 for eight fertilizer projects in 16 states, part of a $1.34 billion package that would add about 1.08 million tons of yearly output.
Farmers get 11.8 cents of the food dollar, so fertilizer moves grocery prices slowly and unevenly: fresh vegetables are forecast up 5.8 percent in 2026, while the farm share of a loaf of bread is 4.8 cents.
New Jersey farms spent $99.7 million on fertilizer, lime, and soil conditioners in 2022, up 46 percent from 2017, and the state's lawn fertilizer blackout starts November 15.
What is fertilizer, and who makes it?
Fertilizer supplies the three nutrients plants pull from the soil in the largest amounts: nitrogen (N), phosphorus (P), and potassium (K), the "N-P-K" numbers on every bag. Phosphorus and potassium come from mined rock: phosphate rock in Florida, North Carolina, Idaho, and Utah, and potash from deep mines, most of them in Saskatchewan, Canada. Nitrogen is different. It is manufactured by combining nitrogen from the air with hydrogen stripped from natural gas, under heat and pressure, to make ammonia. The method is the Haber-Bosch process. Fritz Haber filed his patent in 1908 and received the Nobel Prize in Chemistry in 1918. A 2008 paper in Nature Geoscience by Jan Willem Erisman and colleagues estimated that ammonia made this way supports almost half of the world's population through the extra food it grows.
Ammonia is the base product. It is either injected into the soil directly as anhydrous ammonia (82 percent nitrogen) or upgraded into urea, UAN liquid solutions, or ammonium nitrate.
The industry is concentrated. USDA's October 22 release says four companies control about 77 percent of North American nitrogen production capacity, two companies hold more than 90 percent of phosphate capacity, and two companies produce about 90 percent of North America's potash. The United States imports about 13 percent of its nitrogen, 16 percent of its phosphate, and 95 percent of its potash, according to Purdue economists writing for farmdoc daily in April 2026. Canada supplies 79 percent of that potash and 49 percent of nitrogen imports.
Sources: USDA press release, October 22, 2026; farmdoc daily, April 20, 2026; Erisman et al., Nature Geoscience, 2008 (ScienceDaily summary); CF Industries fertilizer FAQ
What do fertilizer prices look like right now?
DTN's weekly survey of retail fertilizer prices, published October 21 for the week of October 12 to 16, 2026, shows nitrogen leading the increases while phosphate and potash have barely moved:
Anhydrous ammonia: $987 per ton, up 5 percent from a month ago and 18 percent from $838 a year ago. That is $0.60 per pound of nitrogen, the lowest of the eight products.
Urea: $674 per ton, up 13 percent from $595 a year ago ($0.73 per pound of N).
UAN32: $486 per ton, up 4 percent from a year ago ($0.76 per pound of N). UAN28: $441, up 7 percent.
DAP: $937 per ton, up 2 percent. MAP: $981, up 5 percent. Potash: $503, up 3 percent. 10-34-0: $702, up 5 percent.
The spring spike was sharper than today's level. University of Illinois economists tracked anhydrous in Illinois from an average of $828 a ton between September 2025 and February 2026 to $1,123 on April 17, 2026, a rise of about 36 percent, before prices eased in May and began climbing again this fall.
What that does on a farm: for a central Illinois corn acre expected to yield 241 bushels, farmdoc daily put total fertilizer cost at about $190 an acre before the conflict and $217 after it, up $27 or about 14 percent. For soybeans, which fix their own nitrogen, the increase was only $2 an acre, from $85 to $87. Rutgers Cooperative Extension posted its own per-acre worksheet for New Jersey growers on April 5 after urea rose 40 percent between mid-February and March 30.
Sources: DTN Retail Fertilizer Trends, October 21, 2026; farmdoc daily, May 5, 2026; Rutgers Plant and Pest Advisory, April 5, 2026
Why are fertilizer prices rising now?
Two forces stack on top of each other.
Natural gas. For most producers, more than 70 percent of the cost of making ammonia is the natural gas that goes into it, according to CF Industries, a major nitrogen producer. When energy prices rise, nitrogen prices follow within weeks.
The Strait of Hormuz. The conflict with Iran began February 28, 2026, and the strait was effectively closed to commercial shipping by the end of that month. The WTO's trade tracker, in its September 21 update, said shipping through the strait "remained severely constrained" through July and August, with fertilizer-related shipments (ammonia and sulfur) largely absent in late August. The region matters more for fertilizer than most people realize. Purdue economists note that about 30 percent of global fertilizer shipments came out of the Persian Gulf in 2024. IFPRI's Rob Vos reports the Middle East supplies about one third of global urea exports, 40 to 45 percent of sulfur exports, and that Saudi Arabia alone provides about 20 percent of the world's phosphate. Urea prices roughly doubled within weeks of the closure, then softened in May when China said it would lift its urea export ban. StoneX's Josh Linville told AgWeb on October 21 that China's approved exports could reach 8 to 10 million tons this year, up from a typical 5 to 5.5 million, but mostly in prilled form, which US farmers rarely use.
The sulfur problem. Making phosphate fertilizer takes sulfuric acid, about 0.4 tons of sulfur per ton of phosphate, according to Mosaic's Ben Pratt. Linville estimates half the world's sulfur moves through Hormuz and Russia supplies another 17 percent. Pratt says sulfur traded between $100 and $300 a ton for years and now sits above $1,000. Producers expect to make about 45 million tons of phosphate this year against normal consumption of about 75 million, which is why Mosaic is warning about shortages, not just prices. University of Illinois researchers put DAP at about $850 a ton, up from about $700 at the start of 2026, and sulfur prices up more than 130 percent year to date.
Washington's response. On October 22, Vice President J.D. Vance and Agriculture Secretary Brooke Rollins announced in North Platte, Nebraska, the first awards under FIELDS (Fertilizer Investment and Expansion for Long-Term Domestic Supply), run by USDA Rural Development with Commodity Credit Corporation money. USDA proposed about $573 million for eight projects, with total project costs of about $1.34 billion and about 1.08 million tons of yearly capacity. The largest awards: Intrepid Potash near Carlsbad, New Mexico ($139 million toward a $265 million sulfate of potash plant); Agriculture Project Holdco in Lewis, Kansas and Fair Oaks, Indiana ($116.9 million, ammonium nitrate from dairy manure); PCI Nitrogen in Pasadena, Texas and St. Helens, Oregon ($100 million); and TalusAg ($99.8 million for 20 modular ammonia units at 11 sites in seven states). USDA's own analysis projects nitrogen prices about 4.4 percent lower and potash about 5.3 percent lower once the plants run. The funding is described as proposed, and no construction dates were given.
Sources: CF Industries; WTO Strait of Hormuz Trade Tracker; IFPRI, July 2, 2026; AgWeb, October 21, 2026; USDA, October 22, 2026; DTN, October 22, 2026
How do fertilizer prices affect grocery prices?
Less than you would guess, and with a lag. USDA's Food Dollar series says farmers received 11.8 cents of every dollar spent on domestically produced food in 2024; the other 88.2 cents went to processing, packaging, transportation, wholesaling, retail, and food service. Fertilizer is only a piece of that 11.8 cents. The farm share is 18.5 cents for groceries as a whole, but it varies enormously by product: 69.1 cents for eggs, 52.2 cents for beef, 50.8 cents for fresh milk, and just 4.8 cents for bakery products. So a swing in nitrogen costs barely registers in a loaf of bread, but it shows up faster in foods with less processing between the field and the shelf.
Fresh produce is where to watch. Vegetables are nitrogen-hungry crops, and USDA's Food Price Outlook, updated October 23 with September data, forecasts fresh vegetable prices up 5.8 percent in 2026 (range 4.8 to 6.8) and fresh fruit up 2.9 percent. Food-at-home prices overall were 1.8 percent higher in September 2026 than a year earlier, with a 2026 forecast of 2.3 percent and a 2027 forecast of 1.0 percent. The lag matters: fertilizer bought this fall feeds a crop harvested in 2027, and IFPRI estimates energy and shipping shocks take three to six months to reach store prices and can linger 12 to 18 months.
Sources: American Farm Bureau Federation, March 23, 2026; USDA ERS Food Dollar chart, April 28, 2026; USDA ERS Food Price Outlook, October 23, 2026; IFPRI
What does expensive fertilizer mean if you own land?
High nitrogen prices reward the people who know exactly what their soil needs. Three moves:
Test before you buy. The Rutgers Soil Testing Laboratory charges $20 for a standard fertility test with recommendations for two plantings, $55 for a full farm test, and $18 for organic matter. Most state land-grant labs are in that range. University of Illinois economists wrote on March 31 that at today's prices, trimming nitrogen to the recommended rate saves about $15 to $30 an acre for farms applying 25 to 50 pounds over it.
Grow your own nitrogen. Legume cover crops fix nitrogen from the air. SARE's Managing Cover Crops Profitably reports hairy vetch consistently replaces up to 100 pounds of nitrogen per acre in no-till systems, with Maryland trials accumulating 130 to 180 pounds. In the Northeast, plant by mid-September to net about 100 pounds of available N by mid-May.
Plant perennials. NC State's Southeast Regional Caneberry Production Guide recommends 60 to 80 pounds of nitrogen per acre per year for an established blackberry planting, and only 20 to 50 pounds in the planting year. The University of Illinois' recommended corn rate is 172 to 186 pounds per acre, more than double. Perennial fruit keeps living roots in the ground year round, and once established it does not need to be re-fertilized from scratch each spring.
If you have a yard or a field you are tired of mowing, that is exactly the kind of planting we design at Curated Nature: Stop mowing grass, start growing fruit.
Sources: Rutgers Soil Testing Laboratory fees; SARE, hairy vetch; NC State Extension, Fertility Management, 2023; farmdoc daily, March 2026
Garden State minute: what New Jersey spends on fertilizer, and the November 15 blackout
New Jersey's 9,998 farms reported $99.7 million in fertilizer, lime, and soil conditioner expenses in the 2022 Census of Agriculture, 7.1 percent of all farm production expenses, up from $68.3 million in 2017, a 46 percent jump that came before this year's spike. The number of farms reporting the expense rose from 3,708 to 4,295. On April 5, 2026, Rutgers Cooperative Extension's Seowoo Sophie Lee posted a per-acre cost worksheet after urea rose 40 percent and liquid 32 percent nitrogen 29 percent between mid-February and March 30; year over year, UAN32 was up 53 percent in March.
For homeowners, New Jersey's fertilizer law bars applying nitrogen or phosphorus lawn fertilizer from November 15 through March 1 (commercial applicators must finish by December 1), requires a 25-foot buffer from any water body, and has required lawn-care professionals to be certified through Rutgers since January 5, 2012. If your lawn needs a fall feeding, the window closes in three weeks.
Sources: USDA NASS, 2022 Census of Agriculture, New Jersey Table 4; Rutgers Plant and Pest Advisory, April 5, 2026; Ocean County Soil Conservation District, NJ Fertilizer Laws
From the farm
We are tilling areas for grass planting and finishing our structure! we just got a new entry door installed on the office, very exciting times!
What to watch next on fertilizer prices
DTN's Retail Fertilizer Trends, published each Wednesday. Fall is the Midwest's main anhydrous application window, so October and November prices set the tone for spring.
The Strait of Hormuz and China's urea exports, which Linville puts at a potential 8 to 10 million tons this year. He expects elevated prices into spring 2027 regardless.
North American nitrogen inventories, which Linville said were at about the lowest levels he can recall when summer fill began July 1.
Sulfur availability for phosphate, and US-Canada trade policy for potash (Canada supplies about 79 percent of US potash imports).
The eight FIELDS projects: whether USDA finalizes the proposed $573 million and when construction starts.
Stop mowing grass. Start growing fruit.
The price of nitrogen is set half a world away. What your soil actually needs is set in your own backyard. If you own land anywhere in the country, Curated Nature offers remote consulting and design-only plans; full installation and ongoing management are local to Southern New Jersey. The site visit is free, and berries typically begin producing in their second year, grapes in their third, and tree fruit in years three to five. Start here: www.curatednature.co/backyard-fruit-profits
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