Disappointing U.S. Plantings, Exploding Urea Prices, Fertilizer Squeeze Add Fuel To Global Food Inflation

The energy shock radiating from the Hormuz chokepoint and the broader Gulf region has already begun to morph into a global fertilizer squeeze, raising the risk of weaker harvests later this year across key agricultural regions and, in turn, tighter global food supplies. What started as an energy flow disruption is far from contained, and second-order shocks are now underway, emerging slowly at first, then all at once, starting to look like a slow-motion train wreck.

"The global shortage of nitrogen fertilizer created when Iran closed the Strait of Hormuz amplifies this trend toward lower global production," StoneX Chief Commodities Economist Arlan Suderman wrote in a note. He said the good news is that the US is still well supplied.