- Higher fertilizer costs will lead to higher food costs…
- The American consumer isn’t prepared…
- What if you could claim a stake in what’s set to be the biggest IPO ever… starting with just $500? because everyone is talking about Elon Musk’s SpaceX IPO.
Dear reader,
Do you know the substance essential to global agricultural production?
The answer is fertilizers.
What region of the world do many fertilizers originate from?
The answer is the oil-producing nations of the Middle East.
What substance is currently being kinked off in the Persian Gulf?
The answer is fertilizers.
What substance is therefore enduring shortages and drastic price increases?
The answer — once again — is fertilizers.
What do elevated fertilizer prices eventuate in?
The answer is elevated food prices.
What do elevated food prices eventuate in?
The answer is discontented consumers.
What do discontented consumers become in an election year such as this?
The answer is discontented voters.
What do discontented voters portend for the incumbent president and his political party?
The answer is an electoral trouncing.
Get Ready for Food Inflation
CNBC:
- The war in Iran could raise global food prices as the conflict disrupts fertilizer shipments through one of the world’s most critical trade routes.
- While energy markets have focused on oil supply risks, analysts say threats to fertilizer supply chains through the Strait of Hormuz may also bring long-term economic issues through food inflation.
Some one-third of the global seaborne fertilizer trade transits the Hormuz Strait. And the timing of the present disruption, by all accounts, could scarcely be worse:
- More than one-third of globally traded fertilizer passes through the Strait of Hormuz, making it a critical artery for agricultural supply chains. Commercial traffic through the route has largely been halted since the war started late last month, disrupting shipments just as farmers across the Northern Hemisphere prepare fields for spring planting.
- The timing is critical because fertilizers are applied early in the crop cycle and help determine yields later in the year.
I am informed that 25% of all fertilizer imports to the United States come ashore in March and April.
The ides of March are hard upon us. April is but three weeks distant.
Absent a timely re-opening of the Hormuz Strait, we must therefore conclude that fertilizer shortages are in distinct prospect.
As too, are elevated food costs.
Bad Will Likely Go to Worse
In today’s vastly interconnected markets the foot bone is connected to the shin bone is connected to the knee bone is connected to the thigh bone is connected to the hip bone is connected to the backbone is connected to the neck bone.
And since fertilizer costs (a bone situated beneath the waist) represent a substantial component of food costs (the neck bone)… we can expect a figurative bone in the throat — elevated eating costs.
Economist Joseph Brusuela:
- Higher fertilizer costs will certainly contribute to higher prices at US supermarkets.
Grocery costs have leapt some 30% since 2019. And though they have subsided somewhat since inflation’s apex in August 2022, grocery costs have remained… sticky.
Credit One Bank issued its 2026 Financial Confidence Index. What did it reveal?
It revealed that 54% of United States consumers claimed that groceries and additional essentials wielded the greatest impact on their finances over the past year.
Meantime, 44% of survey respondents did not not feel financially prepared to confront potential economic uncertainty in [2026].
Well friends, the unfolding Middle East conflict represents an outsized source of economic uncertainty in 2026.
When does the uncertainty resolve? How precisely does the uncertainty resolve… and on whose terms?
The answers are far from certain at this particular time. Yet a timely resolution appears unlikely.
Just yesterday Iranian forces assaulted three cargo ships in and around the Hormuz Strait.
Sorry, Mr. President, That’s Just Too Dangerous
President Trump has held out the prospect of United States Navy escort through the perilous passage.
Yet the same United States Navy has coughed behind its hands at the suggestion. The mission is simply too fraught.
Reuters:
- The U.S. Navy has refused near-daily requests from the shipping industry for military escorts through the Strait of Hormuz since the start of the war on Iran, saying the risk of attacks is too high for now, according to sources familiar with the matter.
- The Navy’s assessments… reflect a divergence from President Donald Trump’s statements that the U.S. is prepared to provide naval escorts whenever needed to restart regular shipments along the key waterway.
When will the United States Navy take on the mission, Reuters?
- One of the sources said… that escorts would only be possible once the risk of attack was reduced.
That is, United States naval escort will only be available once the need for naval escort has passed.
And so the doctor will see you once your injury has healed.
Thus energy disruptions — and fertilizer disruptions — may endure longer than many envisioned… or are prepared to endure.
We were assured the conflict would be brief. And that an extended conflict benefits no one… Iran included.
Yet the words of French philosopher Albert Camus jump into mind:
- When war breaks out people say: ‘It won’t last, it’s too stupid.’ And war is certainly too stupid, but that doesn’t prevent it from lasting.
Brian Maher
for Freedom Financial News
