Macrodose Iran, Food & Fertiliser
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Mar 11, 2026 Discussion of how a US-Israel conflict with Iran could choke fertiliser flows through the Strait of Hormuz and push up farm input costs. Exploration of the lagged effects on harvests and spikes in fertiliser prices. Examination of drone economics giving Iran leverage and the new vulnerability of cloud data centres to attacks. Consideration of policy responses like rebuilding domestic fertiliser capacity and regenerative farming.
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Fertiliser Supply Chain Is A New Food Chokepoint
- The Iran war threatens global food through fertilizer supply, since about one-third of global fertilizer transits the Strait of Hormuz now blockaded.
- Fertilizer production clustered in the Gulf due to cheap natural gas means price spikes cut yields and push food inflation months later, likely into Christmas.
Fertiliser Price Shock Hits Farms With A Lag
- Fertiliser is typically the single biggest cost for arable farmers, around 25% of the produce sale price, so price rises strongly squeeze production decisions.
- Farmers already bought this season's inputs, so the main impact is a lagged hit to next season yields and food prices six to nine months out.
Rebuild Supply Diversity And Strategic Food Reserves
- Reduce dependency on choke points by diversifying inputs, reviving domestic production, and shifting toward regenerative and traditional farming methods.
- Reopen strategic food reserves to smooth supply shocks and let governments regulate prices by releasing stocks when needed.