Repeated ceasefire attempts in recent weeks have failed to quell tensions in the Middle East, where the conflict involving Iran, the US and its allies continues to have far-reaching implications for global food and agricultural markets.
In the early stages of the war, the fertiliser sector experienced a short-term supply shock.
Nearly five months later, however, the market may be moving towards a more sustained period of uncertainty. According to fertiliser supply and availability scenarios published by the International Fertilizer Association (IFA), a three-month conflict would trigger only temporary supply disruptions and price volatility, with markets recovering within around 120 days.
However, if the war were to continue for six to nine months, normalisation could take a further six to nine months, potentially influencing farm input decisions and affecting the 2027 growing season.
While these scenarios are illustrative rather than formal economic forecasts, they demonstrate that even if tensions were to ease immediately, fertiliser markets would likely require several months to recover.
Nitrogen fertiliser disruption poses biggest risk to dairy farms
For dairy producers, nitrogen remains the most immediate concern due to its critical role in grass and silage production.
The IFA identifies urea as the finished fertiliser most exposed to disruption in the Strait of Hormuz, with around 34% of global urea trade and approximately 23% of ammonia trade passing through the strategic waterway.
The Strait is also a key route for liquefied natural gas (LNG), carrying roughly 20% of global LNG trade.
The link between LNG and nitrogen fertiliser is significant. Around 60% to 80% of the cost of nitrogen fertiliser production is tied to natural gas prices, meaning disruptions can increase production costs or restrict output at fertiliser plants worldwide.
European nitrogen production is particularly vulnerable to supply shocks, according to the IFA. Production costs in Europe are already higher than in many competing regions, and further increases in gas prices could render some domestic capacity uneconomic, increasing reliance on imports at a time when global trade flows remain under pressure.
For dairy farmers, the risk now extends beyond delayed shipments. The greater concern is that higher raw material costs and logistical constraints could combine to keep nitrogen prices elevated long after physical supplies begin to recover.
Why fertiliser prices could remain high
According to the IFA, a six-month conflict could leave growers facing persistently high fertiliser prices even if product availability returns to normal levels.
In regions without government measures to cushion producers from price volatility, farmers may find that fertiliser is available but priced beyond what is economically viable.
This could create significant planning challenges and lead to fertiliser rationing, potentially affecting crop production during the 2027 season.
At the same time, nitrogen demand is expected to remain more resilient than demand for other nutrients because farmers have less flexibility to reduce nitrogen applications without impacting crop growth.
The IFA estimates that global nitrogen use could decline by 1% to 2% under its three- and six-month disruption scenarios. A conflict lasting 12 months, however, could result in a more substantial decline of up to 4%.
More encouragingly, the association expects nitrogen consumption to recover relatively quickly if trade flows return to normal by 2028.
Nevertheless, if prolonged instability continues to affect raw-material markets and fertiliser production, farmers may increasingly ration nitrogen applications, potentially reducing grass yields and forage quality.
The IFA also notes that even fertiliser products with limited direct exposure to disruption in the Gulf could still be affected through higher freight costs, increased raw-material prices and changing nutrient affordability. For dairy producers, however, nitrogen remains the most pressing input concern.
Fertiliser planning for 2027 is coming into focus
As the conflict approaches the five-month mark, concerns are shifting beyond immediate questions of price and availability towards planning for future growing seasons.
Farmers must increasingly consider how much nitrogen they will need to secure, whether phosphorus and potassium applications can be adjusted without compromising long-term soil health, and how fertiliser costs compare with the expense of replacing lost grass or silage with purchased feed.
While there is no certainty that the IFA’s medium-term disruption scenario will materialise, the emerging risk is becoming clearer: fertiliser availability may recover faster than affordability, placing continued pressure on dairy forage production costs well beyond this year.
