AGRICULTURE · CLIMATE TECHNOLOGY
Fertilizer prices are being pulled upward by natural gas and disrupted trade. Microbe-based alternatives could offer farmers a partial escape from that volatility.
Drivers and airline passengers are not the only people feeling higher fossil-fuel prices. Farmers buying nutrients for their fields are confronting fallout from the conflict in Iran, as energy shocks and blocked trade routes work their way into fertilizer markets.
Prices have swung dramatically this year. Expensive natural gas has combined with supply interruptions to raise conventional product costs, exposing how closely food production remains tied to fossil fuels. The link is direct, and it reaches from chemical plants to farm budgets and grocery bills.
A handful of companies argue that fertilizers made with microbes could soften that connection. These products cannot yet replace every synthetic input, but they avoid natural gas and may give growers a more predictable option when energy markets become unstable.
Why Gas Sets the Price
Most industries pay more when fuel becomes expensive because transport and machinery cost more to operate. Fertilizer is exposed twice. Natural gas supplies heat and power to factories, but it is also a chemical feedstock for making ammonia, the essential nitrogen compound behind many widely used fertilizers.
When gas prices rose following the war in Iran, fertilizer followed. That dependence also carries a climate cost: producing fertilizer is responsible for about 2% of global greenhouse-gas emissions. The same fossil resource therefore shapes both the industry’s economics and its environmental footprint.
Trade has added another layer of risk. Roughly one-third of fertilizer carried by sea normally uses the Strait of Hormuz. The conflict has effectively closed the passage to commercial traffic. The World Bank warns that the interruption could make supplies harder to obtain in some of the world’s poorest countries. The United States produces most of the nitrogen fertilizer it consumes, although part of its supply still arrives from the Persian Gulf.
In April, urea—the most widely used fertilizer—cost more than $850 for each metric ton. It stood 80% above the prewar price, reaching a level not seen since 2022, when Russia’s invasion of Ukraine helped drive fertilizer costs to records. Prices have retreated sharply, but the outlook remains unsettled.
A Shock with a Long Tail
Even if energy markets calm, damaged production capacity may keep pressure on farmers. CoBank, a major lender to US agriculture, expects some fertilizer prices to remain elevated through at least 2028. The conflict has affected or completely halted 31 ammonia plants across the Middle East, on top of 20 Russian facilities damaged in recent years.
Travis Frey, chief technology officer at biological-fertilizer company Pivot Bio, describes a supply chain whose volatility has escaped normal bounds. For growers, that unpredictability makes planting decisions harder because fertilizer is purchased before the value of a harvest is known.
The pressure is particularly severe in a business with little room for error. Tim Schnabel, founder and chief executive of Switch Bioworks, notes that farms commonly run on extremely thin margins. A sudden jump in one of their largest input costs can erase expected earnings before crops leave the ground.
Consumers are exposed as well. Fertilizer increases can feed into higher food prices, while this year’s volatile diesel costs are raising farm expenses at the same time. As long as nitrogen production depends on fossil fuels, the price of food will remain entangled with the price of energy.
Microbes Offer a Partial Exit
Biological alternatives from companies such as Pivot Bio and Switch Bioworks use microbes to supply nitrogen directly to plants. Pivot’s organisms are genetically edited, and the company says its products already compete with conventional fertilizer on cost. Because natural gas is not a feedstock, their pricing is less vulnerable to the same energy spikes.
Pivot responded to the outbreak of war by increasing its planned production, lowering prices and giving farmers the option to lock in those prices for three years, according to Frey. The move illustrates a different kind of resilience: manufacturing can expand when conventional supply tightens instead of being constrained by the same gas shortage.
These products are not a complete substitute. Their performance depends on the crop and field conditions. Pivot estimates that its current offerings can displace about 25% of synthetic fertilizer, and it aims eventually to replace 40% to 50%. Even that partial shift could reduce exposure to volatile fuel markets while cutting some emissions.
The broader lesson is that fertilizer security and energy security have become inseparable. Microbes will not repair damaged ammonia plants or reopen a shipping lane, but they can begin diversifying the foundation of crop production. Moving even part of the food chain away from fossil fuels would give farmers—and everyone who buys food—more protection from the next shock.
