Tune In To Tonight’s Fertilizer Debate: How Bad Will It Get?

As we covered earlier this week, Goldman Sachs analysts now say the fertilizer disruption is larger than expected, with nitrogen markets taking the brunt. Urea prices have risen 50% to 70% since the conflict began. Goldman’s Duffy Fischer wrote that “nitrogen fertilizer is the most impacted chemical chain,” adding that the scale of disruption is “greater than we originally expected.”

And signs of improvement have yet to reveal themselves…

As the U.S.–Iran conflict enters its seventh week, ZeroHedge, in partnership with the Macro Dirt Podcast, will host a debate tonight focused on the implications for agriculture, inflation, and global supply chains.

The discussion features former Bridgewater head of commodities Alex Campbell, Brent Johnson of Santiago Capital, and is hosted by Tony Greer and Jared Dillian.

Johnson appeared with Marc Faber and Adam Taggart on an Iran-focused ZeroHedge debate earlier this month and announced that his fund was loading up on fertilizer producers, arguing that even if Hormuz were to open today, he believes the supply shock has yet to be felt and will be severe.

And, of course… Hormuz remains closed.

The hike in prices is already flowing through to earnings. U.S. producers CF Industries and Nutrien are positioned to benefit, supported by relatively stable domestic natural gas costs. Goldman estimates that every $50-per-ton increase in urea prices adds roughly $800 million in annualized EBITDA for CF. Since late February, U.S. Gulf urea prices have climbed about $234 per ton.

Pressure is also building in phosphate markets. U.S. prices, which initially lagged, are now up roughly 23% since the start of the conflict. At the same time, sulfur prices have reached record highs, forcing production curtailments and tightening supply further as input costs rise.

Potash remains less affected for now. Supply routes through the Red Sea have stayed open, and North American supply remains ample, limiting near-term upside.

Join us tonight to see how you should be positioning your portfolio to be better prepared for the coming inflationary shock.

7pm ET here on the ZeroHedge homepage, X feed, and YouTube channel.