If you’ve had to fill up your vehicle’s gas tank or buy a plane ticket lately, you’ve probably felt the effects of rising fossil-fuel prices. But farmers buying fertilizer for their crops are especially aware of just how far the ripple effects of the conflict in Iran have spread.
Fertilizer prices have been on a roller coaster this year, kicked off in part by trade disruptions and high prices for natural gas, a key ingredient in fertilizer production. Let’s take a closer look at why conventional fertilizer prices are so sky-high, and how a few more climate-friendly alternatives could bring farmers some relief.
As fossil-fuel prices go up, nearly all industries are affected, since most of our economy relies on these fuels to move goods and people around.
But fertilizer is even more intertwined with these fluctuations, because natural gas is used as both an energytilizer ingredient. So as natural-gas prices have spiked in recent months because of the war in Iran, fertilizer prices have followed. (It’s worth briefly noting here that fertilizer production is also a majorglobal total.)
Fertilizer trade is being directly affected as well, since about one-third of global seaborne trade in fertilizers passes through the Strait of Hormuz, which has been effectively closed to commercial traffic because of the conflict. Access to fertilizer could get worse for some of the poorest countries around the world because of the strait’s closure, according to a report from the World Bank. While the US largely meets demand for nitrogen fertilizers with domestic production, some imports do come from the Persian Gulf.
At one point in April, the price of urea (the most commonly applied fertilizer) climbed above $850 per metric ton. That’s 80% higher than it was before the conflict and the highest level since 2022, when the Russian invasion of Ukraine and the resulting conflict caused fertilizer costs to hit record highs. Prices have come down significantly, but forecasts remain uncertain.
“There’s just this out-of-control supply chain that’s a lot more volatile than it’s ever been,” says Travis Frey, chief technology officer of Pivot Bio, a company making fertilizer with genetically edited microbes. (For more on these microbes, how they work, and what research is still needed, check out my latest story here.)
Pivot says its products are cost-competitive with chemical fertilizers today. And because they don’t use natural gas as an input, they aren’t subject to the same price spikes. When the war in Iran started, Pivot increased the volume it planned to produce, dropped prices, and allowed farmers to lock in prices for three years, Frey says.
That could be a major help for those farmers, because high prices could be here to stay for a while. Some fertilizer prices could remain high through at least 2028, according to a report from CoBank, one of the largest banks for the agriculture industry in the US.
That’s partly because the war has caused long-lasting damage: 31 ammonia plants in the Middle East have been affected or shut down completely. That’s on top of 20 ammonia plants that have been damaged in Russia in recent years.
Ongoing high prices can be extremely challenging for farmers. “The fertilizer price spikes, and because farmers have paper-thin margins, this is a real problem,” says Tim Schnabel, founder and CEO of Switch Bioworks, another company working on advanced microbe fertilizers.
Higher costs can help push food prices higher, causing all of us to pay more at the grocery store. (It’s not just fertilizer, by the way. Farmers are also getting hit with wild diesel prices this year.) As long as we’re relying on fertilizers made with fossil fuels, food prices will be tied up with energy prices.
Switch and Pivot are among the companies looking to make alternative fertilizers that use microbes to provide nitrogen to plants. There’s a limit to how much synthetic fertilizers these products can actually replace: Depending on the crop and conditions, Pivot says, its products can replace about 25% of synthetic fertilizer today, and the company hopes to reach 40% to 50% of the total. But these alternatives could be a start to untangling fossil fuels and food.
“We can’t keep doing it like this,” Switch’s Schnabel says. “There’s no way we can build a society where the basis of the food chain depends on fossil fuels.”
This article is from The Spark,MIT Technology Review’s weekly climate newsletter. To receive it in your inbox every Wednesday,sign up here.
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