The Fertilizer Bottleneck

Tim Hammerich

News Reporter

This is Tim Hammerich of the Ag Information Network with your Farm of the Future Report.

The conflict surrounding the closures of the Strait of Hormuz has slowed the flow of fertilizer through key global shipping lanes. But getting those supply chains moving again may not be as simple as just reopening a passage. Josh Linville says beyond the immediate disruptions, the bigger challenge is the ripple effect across production, infrastructure, and global logistics.

Linville… “ The best case scenario was that the straight opened yesterday. That didn't happen. The next best case is that it opens today. That doesn't look likely. The next best case is tomorrow. So we're sitting there talking about the best case scenario is literally it reopening immediately, but think through again the logistics of it. We always look at it from our hometown, our back porch. But think about this on the global scale. If the straight opens tomorrow, first you’ve got to convince all these vessels it's safe to sail. That's gonna take a minute. Second, you think about some of the attacks that we've seen, Qatar and Iran both had some of their gas plants destroyed right by missile and drone attacks. Both of those nations' attacks were centered on the plants that feed their nitrogen production facilities. Now you're talking about repairs—that takes a while. Once you get that going, you've got to get LNG, you’ve got to get natural gas production back up and running. Once that starts getting to the fertilizer plant, you’ve got to restart the fertilizer. Then ultimately, this is the thing that’s really going to take time. The Persian Gulf, the Middle East is designed for a steady flow of incoming and outgoing vessels. It is not designed to load hundreds of vessels all at the same time. So there's gonna be a backlog of vessels just waiting to go in.”

Once again, that’s Josh Linville, Vice President of Fertilizer at StoneX Group.