Fertilizer cost pressure

Farmers on Prince Edward Island are warning that higher fertilizer bills are building now and could show up later in grocery prices. (bnnbloomberg.ca) Nitrogen fertilizer prices have nearly doubled since the start of the Iran war, according to Fertiglobe, one of the world’s largest exporters of crop nutrients. The company said Persian Gulf urea exports fell to about 300,000 tons in March from a usual 1.7 million tons. (farmprogress.com) (ukragroconsult.com) The squeeze starts with how nitrogen fertilizer is made: manufacturers pull nitrogen from the air and combine it with hydrogen, usually from natural gas, to make ammonia and then products such as urea. CF Industries said natural gas can account for more than 70% of the variable cost of making ammonia. (fertilizercanada.ca) (cfindustries.com) That link between gas, shipping and fertilizer has tightened this spring because the Strait of Hormuz is a major route for both energy and crop nutrients. The United Nations Conference on Trade and Development said shipping through Hormuz had fallen by more than 95% as the regional conflict escalated. (unctad.org) Prince Edward Island is exposed because farming is a large part of its economy. The provincial government said agriculture generated C$828.01 million in farm cash receipts in 2024, and preliminary 2025 receipts rose to a record C$842.5 million. (princeedwardisland.ca 1) (princeedwardisland.ca 2) Potatoes anchor that farm economy, and they are a fertilizer-intensive crop. Prince Edward Island says farms covered 504,674 acres, or 36.05% of the province’s land, and potatoes remain the Island’s signature export crop. (princeedwardisland.ca) (canada.ca) The price shock does not hit supermarkets overnight because fertilizer is bought before planting, then worked into crops that are harvested months later and sold after storage, processing and transport. Farm Credit Canada said 2026 is shaping up differently from 2022 because input costs are rising again while crop prices are forecast to trend the other way. (fcc-fac.ca) Some farmers can delay phosphate or potash applications for a season, but nitrogen is harder to skip without hurting yields. UkrAgroConsult reported that phosphate and potassium can be stored in soil, while growers are finding it harder to offset jumps in nitrogen and fuel costs because crop prices have not kept pace. (ukragroconsult.com) The pressure is not limited to Atlantic Canada. The American Farm Bureau Federation said about 70% of farmers in its April 3-11 survey reported they could not afford all the fertilizer they needed for this growing season. (fb.org) For now, the warning from Island farmers is about the next bills, not the last harvest. If nitrogen stays expensive through planting and booking for 2027, the cost of growing staples will keep rising before shoppers see the effect at the checkout. (bnnbloomberg.ca) (fb.org)