In response to the Hormuz Strait crisis disrupting global fertiliser trade, the US is set to launch a $500 million FIELDS programme to expand domestic production of fertilisers, shield its farmers from price spikes, and bolster long-term food security.

The ongoing conflict in West Asia and the effective closure of the Strait of Hormuz have triggered severe disruptions in global fertilizer supply chains, prompting the United States to take decisive steps toward self-reliance. On July 1, 2026, US Agriculture Secretary Brooke Rollins announced the Fertilizer Investment and Expansion for Long-Term Domestic Supply (FIELDS) Programme, a $500 million initiative aimed at expanding domestic manufacturing capacity.

This move addresses mounting pressures on American farmers, who face skyrocketing input costs amid weak grain prices and broader supply chain vulnerabilities. The Hormuz crisis, which began escalating after US-Israeli actions against Iran in late February 2026, has halted much of the shipping through this critical chokepoint, affecting roughly one-third of global fertilizer exports, particularly nitrogen-based products like urea.

The Hormuz Crisis: A Global Supply Shock

The Strait of Hormuz serves as a vital artery for energy and agricultural inputs, with Gulf producers accounting for a significant share of the world’s urea and other fertilizers. Since the conflict intensified, shipping has been severely constrained due to attacks on vessels, mines, and heightened risks, leading to suspended exports and production adjustments in the region.

Fertiliser prices have surged dramatically. Urea prices, for instance, nearly doubled in some periods following the disruptions, compounding challenges from earlier volatility tied to the Russia-Ukraine conflict. For US farmers preparing for key planting seasons, this translates to higher costs for nitrogen, phosphate, and potash – essential nutrients that already represent a notable portion of production expenses.

The ripple effects threaten global food security. Reduced fertilizer availability could lead farmers worldwide to cut application rates, potentially lowering yields for major crops like corn, wheat, and rice. Developing nations reliant on imports are particularly vulnerable, with reports highlighting risks of broader food price inflation and shortages.

Construction of New Fertilizer Plants

Administered by USDA Rural Development’s Rural Business-Cooperative Service using Commodity Credit Corporation authorities, the FIELDS programme will fund the construction of new fertilizer plants, expansion of existing facilities, and improvements in storage and transportation infrastructure.

Funding will support production of nitrogen, phosphate, potash, sulfur, and other critical nutrients. Individual projects can receive between $15 million and $150 million, with priority given to those ready to begin production quickly or backed by private-sector investment. Secretary Rollins emphasised the need to prioritise “project readiness” and “financial viability” to deliver results swiftly.

“This initiative will strengthen America’s fertilizer supply chain, improve long-term affordability for farmers, and bring competition back to the industry,” Rollins stated during the announcement, alongside EPA Administrator Lee Zeldin and other officials. The programme marks a shift from previous efforts perceived as less focused, aiming instead for tangible increases in domestic output.

Broader Context: US Fertilizer Landscape

The US has historically relied on imports for significant portions of its fertiliser needs, particularly potash from Canada and nitrogen products from various global sources. Industry consolidation has raised concerns about competition and pricing transparency, with calls for policy interventions to enhance resilience.

Recent market data shows the US fertilisers market valued at around $30-32 billion in recent years, with growth projected but tempered by input cost volatility. Initiatives like the Inflation Reduction Act have already incentivised low-carbon ammonia production, aligning with FIELDS’ goals of modern, efficient facilities.

By investing domestically, the programme seeks to mitigate risks from geopolitical tensions, reduce dependence on volatile international markets, and support rural economies through new manufacturing jobs and infrastructure.

Implications for Farmers and Global Markets

American farmers stand to benefit from more stable and affordable supplies, helping to ease cost pressures amid low commodity prices. Enhanced domestic capacity could also buffer against future shocks, whether from conflicts, weather events, or trade disputes.

On the global stage, the US action highlights a broader trend toward reshoring critical agricultural inputs. 

Countries like India, a major importer, are similarly expanding domestic capacity and diversifying sources in response to the same Hormuz disruptions. India has ramped up tenders and long-term agreements with alternative suppliers like Russia and Morocco.

However, American experts caution that building new production capacity takes time. While FIELDS prioritises quicker projects, full impacts may unfold over years. In the interim, measures like the temporary removal of tariffs on certain phosphate imports from Morocco provide short-term relief.

Challenges and Future Outlook

The fertiliser industry faces multifaceted hurdles, including high energy costs (natural gas being a key feedstock), regulatory permitting delays, and environmental considerations. The FIELDS programme is expected to emphasise sustainable practices, potentially integrating carbon capture technologies.

Analysts project that without such investments, ongoing global risks – geopolitical, climatic, and logistical – could keep prices elevated and margins tight for farmers into 2026 and beyond.

Secretary Rollins’ initiative underscores a strategic pivot: treating fertilizer security as national security. As the Hormuz situation evolves, with diplomatic and military efforts ongoing, the programme’s success will be measured by its ability to deliver increased production and lower costs to the field.