MPR: strait closure raises farming costs

Minnesota farmers are paying more for diesel and fertilizer because the war around Iran choked traffic through the Strait of Hormuz. (mprnews.org) Minnesota Public Radio said Megan Horsager, a row-crop farmer in Montevideo, expects to refill her on-farm fuel tank in June after missing a chance to lock in cheaper diesel earlier. (mprnews.org) The outlet reported diesel and nitrogen fertilizer prices have surged since the strait was largely choked off, and an American Farm Bureau Federation survey found about 70% of farmers could not afford all the fertilizer they need. (mprnews.org) The Strait of Hormuz is a narrow shipping lane for oil, liquefied natural gas and fertilizers, so a disruption there quickly feeds into farm fuel bills and crop-input costs. (unctad.org) United Nations Trade and Development said daily ship transits through the strait fell from an average of 129 in February to 6 in March, a drop of more than 95%. (unctad.org) That shock hit energy markets fast: UN Trade and Development said oil rose 27% and European gas 74% between February 27 and March 9, 2026. (unctad.org) Natural gas is a core feedstock for nitrogen fertilizer, so higher gas prices raise the cost of making urea and ammonia before those products ever reach a farm. (unctad.org) North Dakota State University’s Agricultural Risk Policy Center told MPR that even an optimistic reopening scenario leaves nitrogen and phosphate prices elevated through fall and into 2027. (mprnews.org) Its modeling showed urea would still be 13% above its pre-crisis price even if the strait opens soon, partly because damaged Middle Eastern fertilizer production will take time to repair. (mprnews.org) Grain markets are also firming. Farm Futures said on April 27 that December corn rose to $4.88 a bushel after hitting a four-week high, with traders watching delayed planting and crude oil above $95 a barrel. (farmprogress.com) Farm Futures said July corn touched $4.6875, the highest intraday price since April 2, and funds added to an already heavy net-long position in corn futures. (farmprogress.com) The Red Sea is adding a second freight problem. Bloomsbury Intelligence and Security Institute said renewed attacks and rerouting since late February have raised landed costs for food-processing imports into East and Southern Africa. (bisi.org.uk) That report said diversions around the Cape of Good Hope usually add more than 10 days to shipping times, while war-risk insurance can add charges of about 0.5% to 1% of a vessel’s value. (bisi.org.uk) For millers, bakers and other food manufacturers, the result is a longer chain of higher costs: fuel, fertilizer, freight, insurance and working capital all move before flour prices do. (mprnews.org) (unctad.org) (bisi.org.uk) Even if ships start moving more normally again, the farm economy is still looking at elevated input costs that researchers say can last into next year. (mprnews.org)