Episode summary
Iran War Sends Shockwaves From Energy Markets to Global Food Supply
Wall Street Week
· · Hosts: Chrystia Freeland · Guests: Josh Linville, Tom Halverson
Summary
The war in Iran is pushing energy costs higher, but the bigger market story is the knock-on effect on agriculture. The host argues that the Strait of Hormuz disruption is tightening nitrogen and phosphate fertilizer supplies just as U.S. farmers are preparing to plant, creating what one guest calls a “double whammy” of expensive fuel and expensive inputs.
Josh Linville says the shutdown has already sent urea prices up 19% in a week and that supply chains for nitrogen, phosphate, and even natural gas-linked production are getting “extremely tight.” He argues that timing is critical: even if shipping resumed immediately, fertilizer arriving in the U.S. would likely miss the key April import window and reach farms too late for this planting season.
Tom Halverson says farmers are already squeezed by low crop prices and higher costs for fertilizer, seeds, and chemicals, which raises the risk of higher food prices and broader inflation. The episode also notes that Canadian potash could help, but it cannot fully replace nitrogen fertilizers, and Linville says the situation is unlike anything he has seen in 24 years.
Key takeaways
- Josh Linville says urea prices rose 19% in the first week of the Iran war, reflecting a sudden supply shock in fertilizer markets.
- The guest says U.S. farmers are most exposed because April is the biggest month for urea imports and shipments now would arrive too late for planting.
- Tom Halverson argues farmers are being squeezed by lower commodity prices and much higher fertilizer, seed, and chemical costs.
- The episode says higher fuel and fertilizer costs should flow through to higher food prices and worse inflation, especially for vulnerable consumers.
- Pam Schwann says Canadian potash can help crop yields, but it is only one ingredient and cannot fully replace nitrogen fertilizers.
- Linville says this is a new kind of fertilizer disruption and the market has never experienced anything like it in 24 years.
Notable quotes
“-What's happening to farmers right now is a double whammy at a time when they're very vulnerable”
“-We have seen a major impact on global nitrogen phosphate values”
“Just a week into the war, the price of urea rose by 19%”
“-Higher fuel prices automatically translate into higher food prices. Higher fertilizer prices automatically translate into higher food prices”
“-It doesn't. This is brand new. We have never experienced anything like this in the fertilizer market”
How the episode opens
Westin: This is a story about the other shoe dropping. The war in Iran has sent the price of oil and natural gas soaring, putting pressure on just about everyone from central banks trying to deal with inflation. -The economics effect could be bigger.
They could be smaller. They could be much smaller or much bigger. We just don't know.
Westin: To people filling their tanks at the gas station. -Before the gas prices went up, I could fill my car up for like 30, 35 dollars. Now it's costing me right at 60.
Westin: But the Strait of Hormuz isn't just affecting energy prices. It's also hitting farmers who need fertilizer for the crops they're about to plant. -What's happening to farmers right now is a double whammy at a time when they're very vulnerable.
Westin: Our special contributor, Chrystia Freeland, who was among those who spotted the fertilizer problem as soon as the war began. -I am a farmer's daughter, and I'm also a former foreign minister and a former finance minister. And one of the first things I thought when this war started, and when it was clear that Iran was going to be blocking the Strait of Hormuz, was, "Oh, no, what's going to happen to the farmers?
Westin: Fertilizer accounts for about 25% of the total costs of farmers of row crops such as corn and soybeans. And since the war with Iran began, prices for nitrogen-based fertilizer have risen dramatically. -We have seen a major impact on global nitrogen phosphate values.
Westin: Josh Linville is vice president of fertilizer at financial services firm StoneX. -Of course, as most farmers will tell you, those prices have skyrocketed. And it's based on the fear of a lack of supply that's out there.
We have seen because of the shutdown of the Persian Gulf, the global S&D for nitrogen and phosphate as well, which isn't getting as much traction, not as much attention.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- iran war impact
- oil and gas prices
- fertilizer cost surge
- nitrogen supply shortages
- food inflation risk
Companies and tickers mentioned
- CoBank
Watch the episode
Watch “Iran War Sends Shockwaves From Energy Markets to Global Food Supply” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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