Arkansas farmers are confronting sharp increases in fertilizer and diesel prices as conflict in the Middle East has shut down shipping through the Strait of Hormuz during the critical spring planting season.
The conflict has stranded more than 200 vessels and prompted insurance companies to cancel coverage for shippers working the Persian Gulf, according to maritime industry sources.
Scott Stiles, extension economics program associate for the University of Arkansas System Division of Agriculture, said urea prices have jumped dramatically in recent days. About 30 percent of the world’s urea—a widely used fertilizer—passes through the Strait of Hormuz.
“Prices went up $70 a ton on Monday,” Stiles said Tuesday. “Most of them were quoting in the upper $500s per ton last week. I called a place on Monday, and they quoted me $640 per ton. I called the place back Tuesday morning, and they said $700 per ton.”
Stiles said one Arkansas farmer reported being unable to get a quote after calling three dealers Tuesday.
“Things are so volatile we don’t really know where we are on the price curve and how far this is going to go,” Stiles said.
The timing is particularly difficult for farmers who delayed purchasing urea earlier in the season.
“Considering the economic situation row crop farmers were already facing, a lot of people were either waiting to see if they got financed or they needed an operating note for cash flow,” Stiles said. “This is happening at the worst possible time. By that, I mean margins were thin to non-existent already going into the ’26 crop year.”
Diesel prices have also surged. As oil refineries in the gulf region shut down, diesel futures jumped from $2.5960 per gallon last Friday to $3.1869 on Tuesday.
“When we published the enterprise budgets in November, we put in a price of $2.46, and now we’re a full dollar a gallon above that,” Stiles said. “Effectively, more than 40 percent has been added to our fuel cost in just the last few days.”
Breana Watkins, an agricultural economics instructor for the Division of Agriculture, said her team is working to update enterprise budgets with current prices, with a goal of completing the updates by Friday.
Stiles noted that prices of other fertilizers like potash and phosphates have not moved significantly. He also said futures markets suggest diesel prices may moderate by May and June.
On Tuesday, President Trump announced on Truth Social that he had ordered the United States Development Finance Corporation to provide political risk insurance for maritime trade through the Persian Gulf. The president also said the U.S. Navy would begin escorting tankers through the Strait of Hormuz if necessary.
