Sean Dengler.

With a war in Iran brewing, one downstream effect is nitrogen prices rising in price with UAN28 leading the way with a 13% increase compared to last month according to the Progressive Farmer. Nitrogen plays a huge role in most farmers’ cropping rotation. Nitrogen is necessary to have a productive yield, and it has a substantial influence on the productivity of farmers in northern Tama County. Having nitrogen is vital to a farm’s survival. While some farmers might be able to use manure and other methods than synthetic fertilizer to cover at least some of their needs, a sizable chunk of farmers rely on the nitrogen which is seeing higher prices.

For this year, most farmers have probably bought their nitrogen needs for the 2026 crop. If big rains come and a farmer thinks they lost nitrogen and must buy more, the impact will be felt on the bottom line if the war drags on. If this war drags on, the better chance the pricing of nitrogen will go higher. 20% of the world’s oil and liquefied natural gas – used to make synthetic nitrogen – passes through the Strait of Hormuz according to ABC News.

The longer war continues, the better chance nitrogen prices will stay high and make the 2027 corn crop more expensive to grow. This is on top of the unprofitability farmers have seen in recent years in row crops. When it rolls around to the fall of 2026 and farmers are looking at their 2027 crop, an already unprofitable situation might get even worse for growing corn and soybeans. With a 46% increase in Chapter 12 bankruptcies in farm country, it reached 315 filings in 2015 with the Midwest greatly outpacing the other countries according to the Farm Bureau, farming is in a tough spot. The Farm Bureau also mentioned farm debt also continues to rise.

The pressure from the Iran War on the nitrogen market intensifies an issue which has existed for years. This is the growing consolidation of the nitrogen industry. Any facts from this point forward are from Farm Action. In 2024, the nitrogen fertilizer concentration ratio of the top four companies was 82%. A concentration ratio of 70% is considered to be highly concentrated and anticompetitive behaviors can happen.

This concentration happened before. In 1939, two companies controlled 90% of the industry. By the late 1970s-1980 due to the enforcement of antitrust law and competitive markets, there were 56 major companies. Since the 1980s, antitrust law enforcement was put on the backburner leading to these companies controlling over 80% of the industry. The phosphorus and potash fertilizer industries are not better. The top two companies control over 90% of the industry. Mosaic possesses 67% of the phosphate market, and Nutrien controls 55% of the potash market.

As for the nitrogen industry, CF Industries controls 39% of the market. Due to their size, they have the power to dictate nitrogen prices. According to Farm Action, Atlas Agro, who is building a zero-carbon nitrogen plant in the Pacific Northwest with federal support, explained in a response to a USDA request for information about concentration in the fertilizer sector by illustrating the incumbent producers have large balance sheets and are able to credibly threaten to expand capacity, which will reduce market prices for everyone all else equal. Using their vast resources, the incumbents can sell more and depress prices near a new-built plant whilst reaping higher prices further away from the plant. It is the same dynamic large grocers use to sell a product below cost while making it up in other departments. The small-town grocer is at a disadvantage, not on skill but scale. In either industry, new capacity coming online is harder to do.

Farm Action goes on to note the Big Three fertilizer companies, CF Industries, Mosaic, and Nutrien, can unilaterally shift market conditions to disadvantage and suppress smaller rivals. These firms have concentrated their production sites in locations that enable them to readily shift supplies from export markets to domestic markets and vice versa. These companies can change the fundamentals of fertilizer supply and demand in the United States at their discretion.

Be skeptical of the supply chain issue excuse causing high nitrogen prices. The last time the agriculture industry saw significant price hikes in the fertilizer industry was not long ago. According to Farm Action, “in 2021, the wholesale fertilizer index increased by more than 60% compared to 2020 levels, and in 2022, wholesale fertilizer prices increased even higher, averaging 132% higher than 2020 prices. Fertilizer incumbents claimed those price hikes were attributable to supply chain shocks that increased their input costs, but their own financial documents refute those claims. Nutrien’s gross manufacturing profit margin was up 669% from 2020, while its cost of goods sold had increased by only 58%. This dramatic expansion of profits mirrored in financial reporting from other incumbents and these trends continued into 2022, with Mosaic improving on its 2021 profits by 120%, Nutrien by 142%, and CF by 212%.”

This consolidation and market power has resulted in them creating scarcity to drive prices. From 1975, when U.S. plants produced approximately 12.3 million metric tons of fixed nitrogen to only 8.4 million metric tons of fixed nitrogen in 2015. This is at the same time as domestic consumption went from 7.8 million metric tons in 1975 to 11.8 million in 2015. Scarcity for the farmer, more profitability for the fertilizer companies. More competition creates more production.

While the Iran War has added more difficulties to growing corn profitably, this is not the main reason nitrogen prices will surge. Like all the other times before when crop prices have gone up and the nitrogen prices follow, it is not magic. It is a monopoly. These companies will push for an extra dollar at the expense of this war.

One way to help reduce the nitrogen cost and save family farms is to fight back against these corporate behemoths. By enforcing antitrust laws, Americans can create competitive markets which work for them, not these multinational companies. It will take time, but it is the solution we must pursue for the sake of our farming communities.

Sean Dengler is a writer, comedian, now-retired beginning farmer, and host of the Pandaring Talk podcast who grew up on a farm between Traer and Dysart. You can reach him at sean.h.dengler@gmail.com.