ByAnam Khan
BNNBLOOMBERG
Published: March 23, 2026
Unless the conflict in Iran improves, rising fuel and fertilizer costs will trickle down to groceries in just a few months, says a farming expert.
With the closure of the Strait of Hormuz, about a third of the world’s fertilizer supply cannot move. As a result, urea and dry nitrogen, which are essential components for growing crops, have jumped by hundreds of dollars per tonne, explains Derryn Shrosbree, a farmer and advocate with 33seven, a Toronto-based advisory firm for farmers.
These price hikes mean it now costs a farmer $40 to $60 more per acre just to plant and maintain their crops, he says.
“That’s obviously impacted the cost of inputs for the farmer, says Shrosbree.”If this continues, yes, we’re going to run into shortages.”
“And that will be a very tricky thing for the consumer, because prices will spike fast.”
He says farmers are seeing a $500 per tonne increase in urea, which is a part of base fertilizer, and also a $250 a tonne increase in dry nitrogen.
Overall, he expects a 10 to 15 per cent increase in base commodity prices, though this will fluctuate significantly depending on the product type.
No supply shortage
The effects of high fuel and fertilizer prices will lag because there is no current supply shortage for farmers, says Shrosbree.
He says Canadian farmers have already stockpiled enough fuel and fertilizer on-site to plant their crops for the upcoming season.
“We will get into the field with no problem with enough nitrogen, urea, sulfur, phosphates, etc,” says Shrosbree.
“So we’re hoping that things calm down a little bit, and by harvest time, which is sort of September time.”
He says if farmers face severe diesel shortages by harvest season, it will affect the crops.
“Combines are very thirsty machines, and go through diesel at a rapid rate. So we definitely want to get this thing done and dusted, so to speak, by hopefully September.”
‘Not all doom and gloom’
He says the current energy market turmoil is similar to the initial shock of the 2022 Russia-Ukraine conflict, where oil prices spiked and then stabilized as the global supply adjusted to a new normal.
“So we’re sensing that this will happen again here,” says Shrosbree.
He says that, in the meantime, it is “not all doom and gloom”. With the Bloomberg Commodity Index up six per cent year to date, he is expecting strong exports.
He also says the Canadian canola industry has seen significant relief regarding tariffs on exports to China with Canola seed tariffs down to less than 15 per cent.
“So we’re super optimistic for a great season, and I think that the commodity prices will more than offset the input prices,” says Shrosbree.
“As you know, Canadian farmers are extremely resilient. We’re used to taking hockey pucks to the face constantly. So we will find a way around this, like we do on most of our challenges.”
Canadian government has been helpful
A federal assistance program for farmers has been particularly useful, says Shrosbree.
The Farm Credit Canada (FCC) program allows farmers to manage spiking input costs, by allowing them to borrow up to $500,000 through a new credit line.
“That has helped a lot of farmers to be able to sort of buffer the current price increases. So we’re grateful for that,” says Shrosbree.
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