By Aya S. Chacar
The global energy crisis caused by the closure of the Strait of Hormuz is only the beginning of the economic cost of the war with Iran.
I study how institutions affect businesses and supply chains, and I expect food prices to rise next, with high prices lasting even after whatever point hostilities end.
Along with about 20% of the world’s crude oil trade and a similar share of the world’s liquefied natural gas shipments, shipping traffic through the strait also carries roughly a third of internationally traded fertilizer, which is key to bountiful crops around the world.
Modern agriculture depends on precise timing of delivering nutrients to plants. When fertilizer arrives late or becomes too expensive to buy in sufficient quantities, farmers are left to either reduce the amount they use, plant fewer crops or switch to crops that need less fertilizer. Each option reduces overall productivity, cutting supplies of basic foods, feed for livestock and key ingredients used in a wide range of food products.
Ultimately, with corn prices rising, summer barbecues may taste a bit different or cost more. Corn on the cob may not be cheap, nor will corn-fed beef. In addition, many store-bought condiments, soft drinks and other food products are made with high-fructose corn syrup and will also cost more.
RJ Sangosti/MediaNews Group/The Denver Post via Getty Images
3 main crops, 3 nutrients needed
Three staple crops – corn, wheat and rice – supply more than half of the world’s dietary calories.
To maximize production, those crops need three main nutrients: nitrogen, phosphate and potassium. Nitrogen helps plants grow. Phosphorus helps transport energy within plant cells and is critical for early root growth and the formation of seeds and fruit. Potassium helps plants conserve water and boosts protein content.
The closure of the Strait of Hormuz has reduced the supply and increased the cost of all three.
Natural gas, which determines 70% to 90% of the cost of producing nitrogen fertilizer, has seen a 20% drop in production due to the war and price increases up to 70%. To preserve its own supplies, Russia has suspended exports of ammonium nitrate, another nitrogen source for fertilizer.
In a similar effort, China, the world’s largest phosphate producer, has blocked phosphate exports, removing 25% of the global supply.
Potash, the potassium-rich component of fertilizers, has also been in short supply in recent years, in part because of economic sanctions on Belarus and Russia, which are major potash producers.
As a consequence, fertilizer prices have risen globally. In the U.S., some fertilizers rose more than 40% in just one month after the war’s start in late February 2026.
Affecting farmers first
Cereal plants absorb the vast majority of their nitrogen needs during their early growth. Applying fertilizer later in the growth cycle is less effective.
Reducing nitrogen application by 10% to 15%, or delaying application by two to four weeks, can reduce corn yields by 10% to 25%.
Producing less corn and wheat reduces not only food available for humans but also food for livestock. Increased fertilizer costs and reduced grain supplies increase the price of raising livestock, making meat and animal products more expensive.
When feed costs become unsustainable, farmers may be forced to kill or sell off the breeding cows and sows that represent the future of the food supply. In the U.S., a combination of persistent drought and high costs in 2022 forced producers to kill 13.3% of the national beef cow herd, the highest proportion ever. As a result, the U.S. beef cattle inventory shrank to its lowest level since 1962, a problem that restricts beef supplies for years.
Ultimately, the costs are passed to consumers. In 2012, when a historic Midwest drought slashed corn yields by 13%, it triggered a surge in feed prices, and U.S. poultry prices rose 20%.
Edwin Remsberg/VWPics/Universal Images Group via Getty Images
More money can’t fix this problem
In mid-March 2026, the U.S. fertilizer supply was around 75% of normal levels. That’s right at the beginning of the time when Corn Belt farmers typically prepare their soil for planting, including the first applications of fertilizer. Subsequent fertilizer applications typically come from mid-April to early May and between late May and mid-June.
Farmers who fear not being able to optimize their corn yields may decide to plant less corn or switch crops and plant soybeans, which need less fertilizer. Either would reduce the corn supply.
Government loan guarantees and aid packages may help farmers cover higher costs, but they cannot address timing if enough fertilizer simply isn’t available when it is needed.
Hitting home
American consumers aren’t facing the gas and food shortages or power outages other countries are seeing from the war, but they will be hit in the pocketbook. U.S. prices for gas and jet fuel are already climbing. The effects on the food supply take longer to appear, but they are coming.
Even when crops are bountiful in the U.S., consumers are not immune to global economic forces. A smaller 2026 crop, with rising demand for livestock feed in some of the most populous countries, including China and India, will put pressure on global corn prices, affecting everyone regardless of their nationality.
In March 2026, the U.S. Department of Agriculture used data from before the Iran war to project a 3.1% average increase for all food prices.
The question for consumers is how much of the rise in corn prices will be passed to the consumer, and how fast.
USDA research shows that the speed and extent of changes in food prices vary widely by food category and the level of processing involved in making the food. Other factors also play a role, such as inventory levels, perishability and market competition. When farm prices change, wholesale prices usually adjust within the first month, but retail prices often take longer – sometimes two to four months.
Christina House/Los Angeles Times via Getty Images
Corn tortillas and other relatively lightly processed corn foods are more likely to show price responses within a few months after corn prices increase. Adjustments to cereals or poultry prices will take a little longer. Changes in the cost of livestock products such as beef will take longer, because there are more steps between the purchase of feed corn and the sale of the meat to consumers.
Other indirect costs, related to the cost of fuel and packaging, tend to hit later. Producers often absorb the price increases in the short term, but some increases are already in the works. For instance, transport companies are adding fuel surcharges on freight shipments.
Food price hikes hit low-income households harder than high-income households, because people with lower incomes spend larger shares of their money on food and housing. For these households, even relatively affordable proteins, such as chicken, may become harder to purchase regularly.
Tariq Ishaq Musa/Xinhua via Getty Images
A global food emergency
The cost and availability of fertilizer will affect the whole world. More than 300 million people worldwide already do not have enough food. The U.N. World Food Program predicts an additional 45 million could join them by the end of 2026 if the conflict in the Middle East continues into the middle of the year.
Crop yields in India and Brazil in 2026 are expected to be lower than normal. East African farmers
struggled to afford fertilizer even before the crisis and will likely have to make do with even less.
These problems may seem removed for most Americans, but food prices are global in nature, and people in the U.S. will soon face these additional costs of the war.
Aya S. Chacar is Professor of International Business at Florida International University.
Laurel says
Trump declared it is “not possible” for the federal government to fund child care, Medicare, and Medicaid.
Remember, you spent your whole working life paying into Medicare. Trump would much rather fund a war against a country he claimed he already obliterated their nuclear capabilities.
Don’t tell me, did he lie again?
America first!
Deirdre says
Today’s news;
Trump warns a ‘whole civilization will die tonight’ if a deal with Iran isn’t reached, plus his lunatic Easter message tells me he’s thinking about using nukes. If not today, what about tomorrow? Sooner or later the entire world is going to get involved, they won’t have a choice. We’re truly on the precipice of World War III.
There’s no way he’ll be removed from office even if he does drop nukes, this is the most corrupt government we’ve ever had. A handful of Congressmen are just now discussing the 25th? Our only hope to get rid of him as if he dies.
Yes I’m worried about fertilizer, I did hear Iran was letting some through for humanitarian purposes, but my biggest concern is nuclear war. This is such a grave moment in time, but does anyone want to hear about it?
If they didn’t want to hear about Gaza, if they won’t watch the news because they just want to be happy, if they think nothing affects them, they’re not going to be concerned about what might happen tonight. If not tonight, what will happen tomorrow? We have a demented psychopath with his hands on the button. Practically everyone I know is annoyed if I say anything about anything, I’m too political, I’m the one with the problem.
With the Cuban missile crisis people were building underground shelters and kids were practicing for nuclear explosions by hiding underneath their desks at school. Now we’re in a much more serious situation and it’s just being ignored by the majority of Americans.
The lack of fertilizer will kill a lot of people worldwide too, but at the moment I’m more concerned with how many people will be murdered tonight, or this week, or this month. Anyone that doesn’t realize we’re terrorists is not paying attention.
Pogo says
Just in time for nuclear winter
… from the river to the sea. And all the deserts.
PaulT says
A frivolous title for a serious sublect FlaglerLive. This war is an obscenity.
Will the price shock caused by Trump’s war of total dectruction actually penetrate the tiny, muddled brains of America’s citizens? I doubt it. H0w many Americans agree with Hegseth and Trump’s ‘Crusader’ message that “God loves this war”?
But why isn’t the whole of Christianity condemning Hesath’s heresy in comparing rescue of a downed pilot on Easter Sundat with the Resurrection?
Incidentally do Americans not know that Israel denied access to the Church of the Holy Sepulchre jn Jerusalem this Easter, to clergy and pilgrims, to celebrate the resurrection which is supposedly the foundation of Christianity. A traditional celebration that has taken place every Easter for the last 1700 years, There were three exceptions, three closures, the first two due to plagues. Black Death in the 14th century then Covid-19 six years ago.
And, the third this year, during a war to destroy a 6,000 year old civilization. (Trump’s words not mine).
FlaglerLive says
PaulT is correct. The headline has been corrected. Thank you.
Bob says
Wouldn’t it be nice to have your own country and depend on nobody else in the world but your countrymen!
Sherry says
@bob. . . not sure what you are talking about, but if it’s Americans we certainly CANNOT count on one another. . . sadly!
Laurel says
Bob: No. We have always advocated free enterprise, and have enriched our lives by interacting with our friends and neighbors.
This planet is a lot smaller than you realize.
Questions says
Laurel,
Have you ever owned, started and run a successful business? Do you know how business works?
Ray W. says
According to a Moneywise article, a 27-strong bi-partisan collection of former agriculture leaders signed a letter directed to House and Senate agriculture committee leaders
In the letter they wrote in part:
“The policies of this administration have caused tremendous harm to the U.S. Agriculture. Farmer bankruptcies have doubled, barely half of all farms will be profitable, and the U.S. is running a historic agriculture trade deficit.”
The group recommended an exemption from tariffs on farm inputs, resolution of the trade war, passage of a new farm labor bill to ease a shortage of farm labor, restoration of funding for agriculture R&D, and extension of the USMCA for another 16 years.
Make of this what you will.
Laurel says
Canada, which no longer trusts us (nor does NATO), is making new connections around us, is an important source of potash and fertilizer.
We are not winning.
Alex says
Trump broke every promise he made to get elected. He hasn’t made America Great Again, he lied only to get elected and him and his family are draining the governments bank account.
We have a Congress that are too coward to stop his madness, and they are just as much to blame as he is.
Sherry says
@ Alex. . . I call them the “Cowering Congress”! BOTH Parties! IMO. . . Congress is MORE to blame than trump! First of all, there are many more of them, and they are suppose to represent us more “directly”. They are all corrupt! Follow the MONEY! They are ALL allowing trump to be a dictator with ZERO oversight! Oversight is their “constitutional” responsibility!
Deirdre says
Also, almost all of Congress on both sides of the aisle takes AIPAC money (bribes) to get elected, which is why they’re obliged to send our tax money to Israel without any limits.
Except for a handful of Congressmen, they all need to be voted out of office in my opinion. I agree this isn’t the doing of one lunatic, and his handful of psychopaths, it’s Congress and the judicial branches facilitating it as well.
Regarding prices, America, just like every other country, is dependent on other countries. Even things we build here we need the parts from other countries, that’s just the way the world is now. Saying tariffs will bring back American industry just isn’t realistic.
The shortage of fertilizer is going to have huge impacts across the world, a lot of Third World nations will face extreme food insecurity. That will happen here too but not to the same degree.
Ed P says
The federal debt will approach 40 trillion dollars sometime this August.
We don’t have the money for lots of things.
The deficit spending has to slow and eventually end before the financial reckoning threshold is crossed.
The United States spends like the fool who says, “ I can’t be out of money, I still have checks left”
Might be good news says
It may lower national health care costs(Medicare, Medicaid, etc.) ! Increasing beef, chicken and pork costs will hopefully force people to stop eating them and eat more whole food plant based. Over 65% of U.S. corn goes to livestock, 20% of wheat and a smaller amount of rice. Corn based junk food will be more. A massive 58 million corn acres of land are used to feed livestock and many more to produce ethanol for cars. Beans, lentils, quinoa, etc can supply the required protein. Healthy for us and healthy for the planet. What democrat can disagree with that!
Signed, a lifelong republican and WFPB evangelist.
Smitty says
Moving to plant based foods won’t be a viable alternative if farmers go bankrupt. Food is not created already packaged. You can’t grow crops without fertilizer or people to plant, maintain and harvest those crops. The Donald has done a great job of raising the prices on everything fuel, fertilizer, seeds, water and removing the cheap labor needed to work on farms. And even of grown it will do no good if nobody can afford to buy food.
Atwp says
Did Trump win the election? Regardless he is the President, a bad leader but he is the leader. Voters heard his lying speeches and voted for him. I’m glad to see a lot of his voters are getting hurt because of their decision. IMO I think they didn’t want a woman to lead the country so they voted for a felon. Anyway I hope prices continue to rise and I truly hope many more of his voters lose their farms and other businesses. If this country become nothing under his leadership that would be great for me. I would like to see Iran bomb this country country to nothing under Trumps bad leadership. Anything to make America look bad is good news to me.
Dennis C Rathsam says
Yesterday all we heard on TV the Dems are calling TRUMP a taco for the cease fire.2 days ago they were ready to convict him of war crimes. Have the Jackass party losts its mine? TRUMP did the world a favor. You all know it. TRUMP played Iran like a cheap fiddle. The thing of it is, FIRE, came out of TRUMPS fiddle. Iran has never made a deal, that they haven’t broke. I hope they realize TRUMPS not playing games, likr previous presidents! DONT…. didnt stop shit! If your afraid of prices going up, stock up now. Fill your freezer & pantry. Most of all this peace agreement wont last, the Mullhlers would rather die, than except defeat! And die they will! 47 yrs of their bullshit is enough for me. These morons are actually claiming victory, that what fools they are, as the sit in piles of destruction, & cement waste! Lets see how smart they really are? Will they except peace, or total devastation?