The Tran war has significantly disrupted the global supply of fertilizer, and of a key feedstock, natural gas. The result: Prices have risen 30% to 50%, though the impact depends on what companies produce and where they fit into the global supply chain. Sizing up a hard-hit sector. By Evie Liu
The Iran war has triggered a sharp disruption in global fertilizer markets. Tensions in the Middle East have effectively choked off transportation through the Strait of Hormuz -- a route that handles roughly one-third of the fertilizer trade. With shipping curtailed and regional gas infrastructure damaged, both production and transport of key nutrients have been constrained, creating a supply shock in already tight markets.
Nitrogen fertilizers have been hit the hardest as costs of natural gas -- a key input -- have soared. Prices have risen 30% to 50% since the conflict began. Phosphate prices have also moved higher, though less dramatically, as exports from the Persian Gulf and the supply of sulfur -- critical for phosphate production -- have been disrupted. Potash, by contrast, has been largely insulated since it's mostly produced outside the Middle East.
The shock has rippled through the farm supply chain. Fertilizer producers such as CF Industries Holdings, Nutrien, and Mosaic are the clearest beneficiaries, but the impact isn't uniform. Each company's exposure depends on the nutrients it produces and how much input costs eat into margins. That helps explain why the three stocks have diverged noticeably over the past two months.
For other agricultural companies, the picture is more mixed. When fertilizer gets expensive, farmers tend to focus on getting more out of every acre, which can drive demand for higher-yield seeds, chemical use, and precision technologies -- benefiting companies like Corteva and AGCO. But if rising costs start to squeeze farm income too much, that support can fade, as farmers pull back on other spending to conserve cash.
What's more, meatpackers like Tyson Foods could face headwinds if higher fertilizer prices lead to more expensive animal feed and increase the costs of raising chickens and hogs. This would come when meat processors are already struggling with losses in the beef business due to record high cattle prices.
Barron's took a look at six agricultural stocks that could be affected by higher fertilizer prices, and asked Wall Street analysts where they might head to next. Investors should choose with caution.
CF Industries/Negative
CF Industries Holdings mainly produces nitrogen fertilizers such as ammonia and urea, whose prices have risen sharply since early March. Compared with producers overseas, lower natural-gas costs in the U.S. have helped the company expand its margins significantly.
But much of the upside may already be reflected in the stock. Shares are up 61% year to date and near record highs. Near-term trading is likely to track Iran-related headlines and energy prices and investors should expect volatility, says Morgan Stanley analyst Vincent Andrews.
Mizuho analyst Edlain Rodriguez believes nitrogen prices likely won't go up much more from here since farmers won't be able to afford them. "While it's thrilling to be on the roller coaster, knowing when to get off is also part of the adventure," he says.
Nutrien/Positive
Nutrien runs a more diversified business, with nitrogen fertilizers and potash each contributing roughly a third of its profits. Its potash supply -- largely produced in Canada -- has been insulated from the Iran conflict, positioning the company as a relative safe haven.
"Investors are holding Nutrien to avoid exposure to the volatility," says Oppenheimer analyst Kristen Owen.
The stock has been largely flat since tensions escalated as some investors worry that higher nitrogen costs could crowd out spending on other inputs. Rodriguez believes concerns are overdone, noting that potash demand should remain resilient given its lower cost compared with nitrogen and phosphate.
Mosaic/Negative
Mosaic's core business is phosphate and potash fertilizers, and the stock has lost 16% since the Iran conflict. Although phosphate prices have risen, costs of inputs like sulfur and ammonia have increased as well.
Supply of sulfur -- a byproduct of oil and gas production -- is particularly tight due to shipping disruptions and reduced production in the Persian Gulf, which came as exports from Russia and Ukraine were already constrained.
"This is something that doesn't change overnight even if there's a cease-fire," Owen says.
Higher ammonia and sulfur costs will weigh on phosphate margins, Andrews says, noting that Mosaic has already shut a phosphate facility in Brazil.
Corteva/Positive
Corteva sells seeds under brands like Pioneer and crop-protection chemicals such as herbicides and insecticides. While there is potential pressure on crop-protection sales due to farmers' tight budgets, the seed business likely won't be impacted.
"We tend not to see farmers skimp on seeds," Andrews says. "If you buy low-quality seeds, you're putting a ceiling on how productive your land can be."
Some investors worry that a shift from corn to soybeans -- where seed margins are lower -- could hurt Corteva. Owen thinks the risk is limited, as many farmers locked in fertilizer purchases last fall and are unlikely to alter planting plans significantly.
Rodriguez believes Corteva is the best-positioned agricultural name due to its seed portfolio. The company's planned split later this year will carve out its seed and crop-protection units, a move that could unlock additional value of the higher-quality seed business.
AGCO/Positive
Agricultural machinery makers tend to see big-ticket purchases such as tractors and combines shrink as high fertilizer costs eat into farm income. Despite substantial government aid in recent years, surveys suggest farmers are more likely to spend those money on crop inputs and debt repayment than on machinery.
Nevertheless, Owen noted that expensive fertilizers could encourage the adoption of precision technologies that improve efficiency and boost yields, especially those bought separately as a retrofit that costs less than new equipment. AGCO is better positioned, she says, given its focus on retrofit technologies and exposure to the European market, which has seen more stable farm income than the North American counterparts.
Tyson Foods/Negative
Some farmers might reduce fertilizer application due to high costs, which could threaten yields in the fall, driving up crop and animal feed prices. That means meatpackers like Tyson Foods would face rising costs for chickens and hogs, which are primarily fed with corn and soybeans. This could squeeze Tyson's margins if it can't pass those costs onto consumers.
The company's beef segment has already been losing money in recent quarters. Tight cattle supply -- driven by years of drought and herd reduction -- has pushed up cattle costs sharply, squeezing meatpackers' beef margins. Chicken has been Tyson's profit engine; now that might also face margin pressure at an already difficult time.
Write to Evie Liu at evie.liu@barrons.com
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May 01, 2026 21:30 ET (01:30 GMT)
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