Goldman Sachs Admits Fertilizer Crisis Worse Than Forecast, Names CF Industries and Nutrien as Winners

On April 14, 2026, Goldman Sachs released a research note from its Americas Agricultural Equity Research team led by analyst Duffy Fischer, formally admitting that its earlier assessment of the global fertilizer disruption had been too conservative. The bank raised its earnings forecasts across the fertilizer sector and stated that the severity of the crisis had exceeded initial expectations.

The crisis is rooted in the closure of the Strait of Hormuz since late February 2026, triggered by the escalation of the Iran conflict. The waterway is a critical artery for global fertilizer trade, carrying roughly 34 to 35 percent of world urea exports, about 25 percent of ammonia, 18 percent of diammonium phosphate and monoammonium phosphate, and approximately 45 percent of global sulfur supply. It also serves as the main route for liquefied natural gas that feeds ammonia and urea production in the region.

Nitrogen fertilizers have been the hardest hit segment. Global urea prices have surged between 50 and 70 percent since the start of the conflict, with some spot markets posting even sharper gains depending on region and timing. Data from StoneX analyst Josh Linville indicates that urea prices have increased by about 230 US dollars per ton in six weeks, a gain of roughly 49 percent, while anhydrous ammonia has climbed around 245 US dollars per ton, a rise of about 32 percent. Iran alone is the world's third largest urea exporter and seventh largest ammonia exporter, according to StoneX market intelligence.

Goldman Sachs named two clear beneficiaries for investors. CF Industries, headquartered in Deerfield, Illinois, and Nutrien, headquartered in Saskatoon, Saskatchewan, are both integrated North American nitrogen producers that benefit from relatively stable domestic natural gas feedstock prices. This cost advantage has become significantly more pronounced while Middle Eastern and Asian competitors face disrupted supply chains and elevated input costs. The bank flagged both companies as best positioned to capture higher realized prices and expanded margins as the disruption persists.

The phosphate segment is also under severe pressure, driven by a tight sulfur market. Sulfur is a key raw material for phosphate fertilizer production, and the previous restrictions on Russian exports combined with growing industrial demand had already left the market strained before the conflict. Sulfur prices are now at historic highs. Goldman Sachs noted that as second quarter sulfur contract prices are settled, domestic DAP prices in the United States will need to be raised further to absorb upstream inflation.

Phosphate producer Mosaic announced on April 8, 2026, the shutdown of two phosphate mines in Brazil and disclosed plans to sell its Araxa asset. The company expects these measures to result in a pre-tax impact of between 350 and 400 million US dollars in the first quarter of 2026. As a result, Goldman Sachs lowered its fiscal year 2026 EBITDA estimate for Mosaic by 9 percent to 1.95 billion US dollars, while maintaining a buy rating and trimming the 12 month target price from 32 to 31 US dollars per share. The closures remove approximately one million metric tons of phosphate capacity from the global market, drawing public criticism from US Agriculture Secretary Brooke Rollins.

The potash market remains comparatively stable for now. Middle Eastern potash production from Israel and Jordan is exported via the Red Sea and has not been subject to the same restrictions, while North American potash supply remains adequate. Goldman Sachs sees no short term reason to adjust potash price expectations but warned of a demand side risk. Elevated nitrogen and phosphate costs may push farmers to prioritize nitrogen within limited input budgets, cutting potash purchases. Potash has historically ranked third in farmer procurement priority, and last year's application was considered sufficient.

The downstream impact on farmers is significant. New survey data from the American Farm Bureau Federation, collected between April 3 and April 11, 2026, shows that 58 percent of US farmers report worsening financial conditions. In the Southern region, 78 percent of farmers say they cannot afford all the fertilizer they need this season, compared to 48 percent in the Midwest. Only 19 percent of Southern farmers pre-booked fertilizer ahead of the season, against 67 percent in the Midwest. On one North Carolina farm, fertilizer and nitrogen costs jumped from 139 US dollars per acre last year to 217 US dollars per acre this season.

Goldman Sachs emphasized that the duration of the Strait of Hormuz blockade is the most critical variable for valuations across the sector. A short shock would lead to inventory drawdowns and spot price spikes, while a prolonged closure amplifies both availability constraints and production cost pressures, creating a structural tightness that favors producers with secure feedstock and logistics. Industry experts cited by trade press warn that even if hostilities end, clearing mined waters, unloading trapped vessels, and repairing damaged ammonia and urea plants would take 60 to 90 days at minimum, with some infrastructure damage potentially requiring years to fully repair.

The United Nations Food and Agriculture Organization and other observers have highlighted risks to 2026 global agricultural output if farmers in key regions reduce application rates, delay purchases, or shift toward less fertilizer intensive crops. Nitrogen fertilizers account for roughly 20 percent of grain production costs in many farming systems, meaning that sustained tightness could influence planting decisions, yields, and ultimately global food prices, particularly in import dependent developing economies.