SPECIAL REPORT: Will The Fertilizer Shortage Create A Global Food Crisis? | Bruce Sherrick

Summary of the Special Report (Fertilizer Shortage & Food Crisis Risk)

Core concern

The video frames a potential disruption risk from closing the Strait of Hormuz (linked to the Iran conflict). Because roughly one-third of global seaborne fertilizer trade moves through the area, the host asks whether this could lead to a global food crisis—potentially even triggering widespread unrest (an “Arab Spring” type scenario driven by food insecurity and inflation).

Main answer: near-term northern hemisphere planting is likely OK; longer-term uncertainty is higher

Bruce Sherrick argues the question is complex, but emphasizes a key point: most of the fertilizer needed for northern hemisphere planting had already been shipped or positioned before the closure, so the coming northern hemisphere harvest cycle is not expected to face a catastrophic input shortage.

He also highlights:

• Timing matters: fertilizers were applied or contracted months earlier (e.g., significant nitrogen for corn applied in fall/winter).
• Historically in the U.S., the bigger issue is sometimes over-application of certain inputs—so the risk may involve rationing and adjustment rather than a complete failure to plant.

Prices rise sharply even if quantities are sufficient

Even when fertilizer is available “on the ground,” Sherrick expects price inflation. Contributing factors include:

• Higher fertilizer costs from trade disruption
• Increased energy costs (diesel/natural gas are major fertilizer inputs)
• Broader geopolitical and tariff shocks
• Expectations of future scarcity, which can lift prices before actual shortages occur

Why the shortfall may not immediately become a harvest disaster

Sherrick compares this situation to other trade disruptions—especially Russia/Ukraine (including Black Sea constraints)—where higher input prices were not always matched by proportional output price offsets. Even so, production did not necessarily collapse because trade/stock/staging helped prevent immediate quantity failures.

He repeatedly distinguishes between:

• Availability for the current planting season (which looks manageable for the northern hemisphere)
• Sustained disruptions across multiple production cycles (where longer-run risk increases)

Supply constraints are real; replacement is hard; “ramping up” isn’t quick

He argues fertilizer production capacity—particularly nitrogen/ammonia—behaves like a yearly system with limited ability to scale rapidly:

• You can’t simply build or expand fertilizer plants on short notice.
• There are bottlenecks in converting ammonia/nitrogen.
• Logistics matter: water/sea transport is far cheaper than rail/truck for this supply chain.
• Some inputs can substitute or reroute, but not everything can.

U.S. vs. Brazil dependency: disruption effects won’t be uniform

A central element is that countries depend on different supplies:

• U.S. imports: about 13% of nitrogen, ~16% of phosphate-related fertilizer, and near-total potassium import reliance
• Brazil imports: about 95% nitrogen, roughly 70–72% phosphate-related fertilizer, and ~100% potassium

This means impacts vary by whether nitrogen vs. phosphate vs. potassium is constrained and by each country’s planting cycle.

If Hormuz closure continues, concern shifts to the southern hemisphere (“next year” risk)

Sherrick suggests that if disruption persists another month or two, it begins affecting the southern hemisphere’s next planting cycle—roughly six months offset from the north.

He also notes possible rerouting and substitution (e.g., Brazil buying from suppliers China previously used, and vice versa). However, these adjustments are typically expensive, keeping output prices pressured.

China appears more vulnerable than the U.S. (food security and calorie economics)

Sherrick frames China as:

• More vulnerable to fertilizer/energy disruptions because it is a large food importer
• Yet capable, at times, of managing risk through trade diversification (including feed/livestock channels)

Still, he stresses that China is generally less able to withstand shocks without policy and consumption adjustments.

Strategic reserves: grains are easier; fertilizer reserves are harder

He argues:

• Grain stocks are relatively easier to track and stockpile.
• For fertilizer inputs:
  • Nitrogen can be stored, and can also be produced when needed.
  • Phosphorus/potassium require mining/refining, making “strategic reserve” solutions less straightforward.

Overall, the lesson from recent disruptions: the global trade system may be less reliable, increasing the value of resilience/insurance over pure efficiency.

Food insecurity can come from quantity shortages or from price

He emphasizes that food crises don’t always look like empty shelves. People can be “starved” because they can’t afford food. Key related points:

• Food inflation matters—how much of income people spend on food affects vulnerability.
• He expects pockets of severe shortage risk (not necessarily a uniform global collapse), especially in parts of Africa and some vulnerable areas of Asia.

If conditions improve quickly, prices may adjust—but effects can linger

If the Strait reopens soon, Sherrick expects prices to moderate within months, with “by harvest” being an important checkpoint.

Even if the immediate crisis ends, he compares it to a disrupted recovery that doesn’t fully “rewind” time—some productivity and market impacts remain.

Investment angle discussed: farmland is resilient

The host asks whether firms like Nutrien could benefit. Sherrick describes these as episodic opportunities: disruptions can favor companies that remain functional while competitors struggle, but the long-term depends on how long the disruption lasts.

He argues farmland is the safer long-run asset because it’s tied to a fixed factor of production (land) and has historically acted as an inflation hedge. He also suggests capital inflows into farmland may be structural (institutional demand for resilient real assets), creating a potential tailwind beyond fertilizer-specific risks.

Technology outlook in agriculture (brief closing context)

Sherrick briefly notes productivity trends:

• Genetics improvements
• Automation/self-driving equipment
• Precision agriculture
• Robotic/targeted weed control (laser/zap and spot-spray approaches)

He argues these trends reduce labor intensity and chemical use over time, though human labor won’t disappear entirely due to the need for dexterity and real-time decisions.

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Presenters / Contributors

• Adam Tagert (Thoughtful Money, host)
• Bruce Sherrick (University of Illinois Urbana–Champaign; professor and director; subject expert)