Logistics Issues Challenge Fertilizer Supply

Moving into the fall 2026 and spring 2027 application windows, some ag retailers are going to have to give serious consideration to just how much risk they are willing to take when it comes to storing fertilizer at their outlets.

“Some retailers got their wings clipped buying some high-priced nitrogen as the market unfolded this spring only to have the market not fully develop this spring and ended up selling those tons for a loss,” says George Secor, CEO and President at Sunrise Cooperative, Fremont, OH. “Many retailers feel they have to have product if the customer walks in. [But] with elemental sulfur being valued where it is and phosphorus retailing for more than $1,000 per ton, many retailers just will not stomach the risk.”

According to Mark Dietsch, Sales Manager, Crop Nutrients at GROWMARK, Bloomington, IL, ag retailers need to act strategically now to prepare for potential disruptions heading into fall 2026. He suggests a three-step approach:

1. Maximize storage space at the facility by filling it up as much as possible to get ahead of any supply disruptions.
2. Start forecasting supply plans early with grower-customers so an ag retailer can predict demand sooner and lock in volume commitments.
3. Be honest with grower-customers about pricing and supply constraints.

Rory Olerud, CEO at AgriPartners, Clear Lake, SD, agrees with this planning advice.

“Fall 2026 is the critical window,” he says. “Retailers who act aggressively on early procurement, storage investment, logistics diversification, and grower communication will be positioned to serve their customers in spring 2027. Those who wait for the market to normalize are likely to find themselves competing for scarce product on a spot market that penalizes late arrivals severely.”

Transportation Disruptions

1. Off the Rails

On July 29, 2025, Union Pacific Corp. and Norfolk Southern Corp. entered into an agreement to merge their two railroads. With this consolidation, the new Union Pacific would create America’s first transcontinental railroad with 50,000 route miles that connect 43 states and more than 100 ports.

However, many oppose this deal, including the agricultural industry. According to The Fertilizer Institute, more than 60% of fertilizer moves by rail year-round in the U.S. In addition, much of the fertilizer that comes into the U.S. market for use is shipped via rail from Canada, which is a major supplier of such macronutrients such as potash. According to Canadian transportation experts, the country’s railroads ship an average of 69,000 tons of fertilizer per day.

Daren Coppock, CEO and President at the Agricultural Retailers Association, believes fewer rail carriers for agriculture could mean higher prices in the long run.

“From our standpoint, concentrated market power in the hands of fewer people for our products does not work out in favor of good business,” says Coppock. “Since two-thirds of our business products are moved by rail, this is a big deal for us.”

To address some of these concerns, Union Pacific and Norfolk Southern submitted expanded customer protections to the Surface Transportation Board over the summer. The filing included four new or expanded commitments.

The combined railroad will expand Committed Gateway Pricing, doubling eligible shipments and extending benefits to bulk unit train shippers.

The program is described as the functional equivalent of thousands of haulage agreements in a single enforceable commitment. The railroads will preserve Class I rail options for three-to-two shippers and two-to-one shippers where legally possible. According to the filing, no prior rail merger has included a similarly broad commitment to preserve three-to-two access.

The companies will provide temporary access to alternative rail service if performance declines during merger integration.

A new rate relief process will offer recourse if claimed public benefits are not delivered in a timely manner.

2. Strait of Hormuz

When, the Iranian conflict began in the spring, one of the fertilizer industry’s most important supply chains — the Strait of Hormuz — was effectively closed to shipping. According to GROWMARK’s Dietsch, nearly half of all global urea exports and about 30% of global ammonia exports pass through this region annually.

“Transportation internationally has been a major headache for the fertilizer industry this summer,” he says. “The Strait of Hormuz is one of the world’s most critical shipping routes for fertilizers, so when shipping gets disrupted there, it impacts fertilizer availability worldwide.”

3. U.S. Rivers

Domestically, much of the agricultural industry’s fertilizer transport happens on the nation’s waterways. However, says Dietsch, even this method of transport has experienced disruptions during 2026.

“[We are] heavily dependent on our river system,” he says. “The past several years, we have dealt with low water. This spring, we were dealing with high water. Both can have huge impacts on transit times.”

Planning Ahead

According to AgriPartners’ Olerud, all of these incidents should not be viewed by the fertilizer industry as abnormal blips in the logistics picture.

“The transportation disruptions of spring 2026 were not a one-time event,” he says. “They revealed deep structural vulnerabilities in the global fertilizer supply chain that have not been resolved.”

For ag retailers not wanting to be caught off guard with fertilizer supply, a strong strategy for the upcoming months and new year will be critical.