NZ farmers brace for potential fertiliser shortage and spike in prices amid Iran war
Wednesday, 11 March 2026
As Iranians brace for further attacks from US forces, farmers in New Zealand are bracing for a potential spring shortage of fertiliser, and a spike in prices.
US President Donald Trump’s war on Iran is bringing back unwelcome memories for farmers from the last big global spike in fuel and fertiliser prices; the invasion of Ukraine by Russia on the order of Russian President Vladimir Putin.
“It’s frustrating that one person’s actions influence what’s happening on my farm here in New Zealand,” said Canterbury arable and sheep farmer David Birkett.
As yet, Birkett said stocks of fertiliser in the country with the likes of Ballance and Ravensdown appeared sufficient to meet autumn demand, and prices have not increased. But farmers’ eyes were on spring.
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“We know there will be a price increase,” Birkett said.
Just how high the price would go depended on how long the war in the Middle East dragged on, he said.
Middle Eastern countries, Iran included, were big manufacturers of some types of fertiliser and the oil necessary to make and ship them.
But there was a double impact on the fertiliser trade from the Iran conflict as the Strait of Hormuz, which was currently closed to shipping after Iran vowed to attack ships passing through it, was a major trade route for fertilisers to get to global markets.
On Wednesday, international media reported Iran was laying explosive mines in the Strait and the US was destroying mine-laying Iranian vessels.
Up to 30% of world fertiliser exports, including urea, ammonia, phosphates and sulphur, pass through the strait, Joseph Glauber of the International Food Policy Research Institute told news agency AP earlier this week.
Major rural lender Rabobank expects farm input price escalation will eat into farmers’ bottom lines, especially as a result of price increases for nitrogen-based urea, a fertiliser key to pasture-based farming.
“Any closure or disruption to shipping in the Strait of Hormuz would limit shipments from Iran, Iraq, Kuwait, Bahrain, Qatar, the UAE, and to a lesser extent, Oman and Saudi Arabia,” Rabobank said in a market update.
Global spot prices for urea have increased by about 40% since the US launched its attacks, though as with oil, prices are volatile, and moving rapidly.
Emma Higgins, senior agricultural analyst at Rabobank, said 45% of global urea supply could be disrupted because of the closure of the Strait.
Iran produced about 10% of global urea.
But, she noted fertiliser suppliers were signalling there was enough fertiliser in the country to get through the autumn and winter.
Fertiliser company Ballance said it was confident it would have the volume of nutrients required to meet customers’ usual autumn needs.
But, the company said: “While we have supply volumes secured over the short-term from other regions, we don’t know what impact this escalation will have on price.
“We have already seen significant price increases leading into this conflict and given this latest escalation and the market’s reaction we anticipate more,” it said.
Ballance said fertiliser pricing experienced movements similar to the imported oil market.
Higgins said the last time such a spike occurred was during the early months of the Russian war to seize territory from Ukraine. But that coincided with weaker demand, particularly from China, for New Zealand animal protein and dairy.
At the time of the current conflict, demand remained strong for New Zealand’s products but the Middle East was a strong market for New Zealand meat, and only time would tell whether that was impacted by the war.
Exchange rate movements had mitigated the cost increases to some extent, Higgins said.
Ravensdown’s chief operating officer Mike Whitty said Russia’s invasion of Ukraine resulted in a spike in urea pricing, but that fell back within months as markets and supply chains adapted.
A best case scenario for the conflict in Iran was for de-escalation in the coming weeks, and fertiliser and oil markets settling down. The worst was for a long, drawn out conflict disrupting the Strait and the Middle East.
But it could be a trying time for farmers.
“Farmers are really resilient people. You have to be a really special person to be a farmer,” Higgins said.
“You have got to be quite optimistic, and no stranger to global crises, but it would be pretty challenging for some.”
Birkett felt New Zealand needed to wake up to the repeated global disruptions, and build more local resilience.
Free trade agreements had been good for exporting, he said, but they had also limited the country’s ability to invest in strategic strengthening of local resilience, such as onshore manufacturing of fertiliser.