Originally published by Gregor Heard of Farmonlne National
10.03.2026
Australian farmers are looking at the sums for their upcoming planting programs in an attempt to minimise their nitrogen fertiliser usage in light of soaring costs and concerns about supply.
The Iranian conflict has wreaked havoc with Australia’s nitrogen fertiliser import program right at the period when the majority of the nation’s urea is brought in before the autumn sowing period.
After sitting at around $800 a tonne on a retail basis prior to the bombing of Tehran there are now quotes of $1250/t and those within the industry have privately said there is a good chance of values hitting $1500/t.
NSW Farmers grains committee chairman Justin Everitt said there was the very real possibility that the current fertiliser crisis, combined with issues sourcing fuel, could have a material impact on the tonnes produced by Australian grain growers this season.
“In my case I’m looking at $1200/t urea and thinking that is probably too dear, and that will be the case for a lot of growers,” Mr Everitt said.
“If that is the case then obviously yields are going to be down proportionate to the cut in urea rates, whether people put on half of their normal rate or whatever the ratio is, while if things get even worse and we can’t get any urea within the window we need it then yields are going to drop away,” he said.
He said the timing, along with results of the season before, meant many growers would be particularly exposed.
“It is right at the time people are sorting out their nitrogen needs, at least for the first half of the season and now that is all in disarray,” he said.
Agronomically, he said cutting rates would be a bad thing for many growers.
“It wasn’t the case for us here, but many had a big year last year which was great, but it rips a fair bit of nutrient out of the soil which needs to be replaced,” he said.
In Queensland AgForce grains section president Brendan Taylor said a worst-case scenario could see local shortages of feed grain.
“There is a lot of grain produced for the livestock industry here, but if we find we just can’t get our hands on enough urea or the price is too high then people may have a look at other, less nitrogen-intensive crops, such as chickpeas,” Mr Taylor said.
“That is well and good, but the cattle and chickens aren’t going to be able to eat a ration of just chickpeas,” he said.
Both men had gloomy views as to the likelihood of the price coming down in time for the major Australian purchasing season.
“Our experience is normally these prices can be very quick to rise, but slow to fall,” Mr Taylor said.
His comments were backed by agricultural analyst Andrew Whitelaw, Episode 3, who said past experiences showed there was unlikely to be a significant easing in prices through the critical autumn period even if the conflict ended tomorrow.
“What we saw in other comparable situations, such as the early days of the Ukraine war, was that prices take some time to come back to their pre-conflict values, which means farmers probably need to factor in higher values in their nitrogen budgets,” he said.
Unlike the Ukraine conflict, the Iranian war is not having a significant impact on the production or movement of grain, so there is not likely to be the silver lining of a sharp rise in grain prices such as happened when Russia invaded its western neighbour.
International analysts have similarly grim outlooks.
Chris Vlachopoulos, senior editor at fertiliser analysts ICIS, said global urea prices had already risen around 35pc to three year highs.
“Tight global availability, combined with halted production at facilities such as QatarEnergy and existing supply pressures in countries including Iran, Russia and China, is amplifying market tension just as key agricultural regions approach fertiliser application season,” Mr Vlachopoulos said.
For Rabobank farm inputs analyst Samuel Taylor the major question was the length of the disruption.
“The key uncertainty now is whether the impact remains transitory or becomes structural – which will hinge on the duration and potential escalation of the conflict,” Mr Taylor said.
“A rapid de-escalation would contain the damage to short-term volatility, but there is the risk of more lasting tightening, a persistent 20pc-30pc premium of global urea over Chinese prices could further delay Chinese (urea) exports,” he said.
