In Australia, the price of urea \u2014 the most commonly used fertiliser \u2014 skyrocketed from $845 in February to around $1,435 per tonne this month, according to analysis from GrainGrowers. <\/p>\n
Wimmera Mallee Environmental and Agricultural Protection Association president Ross Johns said in his 44 years of farming, conditions have never been this \u201cextreme\u201d. <\/p>\n
\u201cWe\u2019ve seen high prices for fertiliser and farm inputs before, but not quite to this extreme,\u201d he said. <\/p>\n
\u201cAt the moment the input prices are about 30 to 50 per cent higher than the previous highest in about 2008.\u201d<\/p>\n
Inputs describes all the costs farmers pay to produce \u2014 including their employees\u2019 wages, machinery, fertiliser and fuel. <\/p>\n
Johns\u2019 family has been farming wheat, barley and canola in Victoria\u2019s west since 1873. <\/p>\n
In 1982, Johns inherited his first 3,500 acres, which has since expanded to 15,000 acres.<\/p>\n
Johns said his crops rely on urea throughout the year for a better yield but rising costs have forced him to reduce fertiliser application this season.<\/p>\n
\u201cI just use a little less and use it more sparingly, but using less will ultimately result in lower crop yields,\u201d he said. <\/p>\n
\u201cI\u2019m expecting crop yields to be down 10 to 15 per cent on what they potentially could have been, and that\u2019s certainly going to have a significant negative impact on Australia\u2019s economy.\u201d<\/p>\n
![\"Ross](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/05\/90f223051eda13d4819048aee6f7f1dbdb4b1d72.png\")
Ross Johns (L) warned of reduced yield if the fertiliser shortage continues. Credit: Supplied<\/p>\n
CommBank agricultural economist Dennis Voznesenski said reduced production will ultimately lead to higher food prices. <\/p>\n
\u201cIf you have a 15 to 45 per cent reduction in your application then the production impact is 9 to 25 per cent,\u201d he said.<\/p>\n
\u201cReduced production gradually leads to higher prices both offshore and locally.\u201d <\/p>\n
Voznesenski said Australian Premium White prices had already risen 12.4 per cent in northern NSW and 19 per cent in southern Queensland since February. <\/p>\n
\u201cThis is driven primarily by dry conditions and partly by increased fertiliser costs,\u201d he said. <\/p>\n
Voznesenski said by June the world was going to reach a \u201cpoint of no return\u201d if the Strait of Hormuz remained closed \u2014 with prices jumping shortly after.<\/p>\n
\u201cI\u2019m just waiting to see if if the strait is opened up or not, and at that … point of no return \u2014 once we get to June, July, that\u2019s when I\u2019ll go, \u2018OK, so the world is going to be slightly different now,\u201d he said.<\/p>\n
\u201cIf large shipments still aren\u2019t leaving the Strait of Hormuz by the end of July that\u2019s when the market is likely to start gradually pricing in the production impact.\u201d<\/p>\n
![\"CommBank](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/05\/4cc886ffabcb911a8f345381fa4a6c898f6e2f93.png\")
CommBank agricultural economist Dennis Voznesenski says the Strait of Hormuz closure could soon have a significant impact on food prices. Credit: Supplied<\/p>\n
Despite the concerns, the Albanese government is hoping to avoid getting to a \u201cpoint of return\u201d with a multi-billion-dollar fertiliser and fuel storage plan announced in the recent federal budget.<\/p>\n
In response to the federal budget, Johns said farmers were encouraged by investment directed at guaranteed fuel supplies and fertiliser.<\/p>\n
\u201cWe\u2019ve been trying to tell them that agriculture is a very important industry for Australia, and suddenly they have recognised it,\u201d Johns said.<\/p>\n
However, Johns said farmers were concerned that elevated inflation will push interest rates higher, adding further pressure on the sector. <\/p>\n
\u201cMost farmers have some level of debt so that will have a negative impact on the agriculture sector,\u201d he said.<\/p>\n
With no indication of when the war might end, Johns said the solution was in developing Australia\u2019s own domestic urea supply.<\/p>\n
\u201cWe are a huge gas exporter, and urea is made from gas, we could make our own\u201d he said. <\/p>\n
A urea and ammonia manufacturing plant, Project Ceres, is currently under construction in Karratha, WA and is expected to become the nation\u2019s largest urea plant.<\/p>\n
However, the project is not expected to be finished until mid-next year. <\/p>\n
\u201cWe must rely on overseas supplies for some time to come yet,\u201d Johns said. <\/p>\n
After four decades in farming, Johns said he worries about the future of the industry he plans to eventually hand over to his son. <\/p>\n
\u201cI\u2019m very supportive of young people in farming, but it\u2019s pretty tough starting out in agriculture at the moment,\u201d he said. <\/p>\n
\u201cThe government must understand agriculture not only feeds the population of Australia, but it also provides 14 per cent of Australia\u2019s exports.\u201d<\/p>\n
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