Fertilizer prices may remain above pre-conflict levels through 2028

Supply disruption replaces the 2022 trade shock

Global fertilizer prices, particularly for phosphate products, could remain above levels seen before the Middle East conflict through 2028, according to a CoBank study reported by ZOL.ru. Although prices have retreated from their peaks, constrained supply is expected to keep the market under pressure for several growing seasons. North Dakota State University, whose forecast was cited by CoBank, expects prices to reach a prolonged plateau after their initial rise and remain above pre-crisis levels until 2028.

CoBank distinguishes the current situation from the fertilizer crisis of 2022. That disruption largely forced buyers and sellers to redirect trade flows. The present problem also involves the physical loss or curtailment of production capacity, which may take considerably longer to restore. The study estimates that the Middle East conflict directly affected or completely halted about 31 ammonia plants. Another 49 plants in India, Pakistan and Bangladesh reduced or stopped production because of limited access to feedstock.

Middle East concentration raises global exposure

The Middle East supplies more than 60 million tonnes of fertilizers and raw materials, according to the figures cited by CoBank. About 45 million tonnes move through the Strait of Hormuz. The region also accounts for approximately 50% of global sulfur trade and more than 30% of global urea exports, making prolonged production or shipping disruptions immediately relevant to fertilizer availability and prices in importing markets.

Phosphate fertilizers face particular pressure because their supply was already constrained before the latest Middle East escalation. Ammonia and sulfur are key variable inputs in phosphate production, and the availability of both is now under strain. Restrictions on Chinese phosphate fertilizer exports add another constraint. Potash is comparatively better positioned, CoBank said, although higher transport costs are also affecting its price.

Phosphate output and demand face a sharp adjustment

An Argus forecast cited by CoBank indicates that global consumption of diammonium phosphate, monoammonium phosphate and triple superphosphate could decline 13% in 2026. Production is projected at less than 60 million tonnes, compared with an earlier expectation of almost 69 million tonnes. The reduction reflects shortages of raw materials and operating restrictions at plants in several countries.

The outlook implies sustained pressure on farm input bills and crop margins. Farmers are less willing to reduce nitrogen applications because insufficient nitrogen can directly lower yields. Savings have instead concentrated on phosphorus and potassium: US application rates for those nutrients have fallen 10–15% in recent years. Total NPK use by US farmers has declined by about 20% since 2008, according to the report.

Lower applications create a delayed yield risk

Cutting phosphorus and potassium can protect cash flow in the short term, but the agronomic effects may appear only after two or three years. As reserves of nutrients in the soil become depleted, yields may begin to suffer. CoBank warns that continued reductions in fertilizer use worldwide could therefore cause a moderate decline in crop productivity and leave agricultural output below the level achievable with normal application rates.

That outcome could provide some support to global grain and other agricultural commodity prices, while leaving producers exposed to a difficult trade-off between current costs and future yields. CoBank does not expect a rapid return to previous market conditions. Nitrogen and especially phosphate fertilizers remain vulnerable to plant shutdowns, feedstock shortages and uncertainty in global trade. For farmers, processors and input distributors, the forecast points to elevated costs, cautious purchasing and more complex nutrient management through at least 2028.