Why the Iran war hasn't caused a global oil crisis – yet

Modern industrialized agriculture absolutely depends on manufactured fertilizer. It’s gotten to the point where demand is almost perfectly inelastic - farmers literally cannot grow a successful crop without it, and in the amounts needed. They cannot just “tighten the belt” on fertilizer usage - fall beneath a certain level, and the entire crop becomes unsellable.

And yet, a good 60% of all Urea - a critical fertilizer base component - comes out of the gulf states via the Strait of Hormuz.

We are going to see the opening scenes of this crisis over the winter, as the southern hemisphere countries start reacting to fertilizer price spikes as supply gets massively constrained.

And next year through the fall time will be the major acts, as northern-hemisphere crops cannot be grown.

Remember: it takes time for products to be manufactured and move through supply chains. The southern hemisphere countries will be in the process of fertilizing now through the fall, depending on crop. Northern hemisphere countries will be fertilizing from late fall through next summer. We could easily be looking at severe shortages of fertilizer lasting into 2027, leading to a catastrophic yield collapse of agriculture for two years running.

And this can and will also impact meat production - every species that ends up on our dinner plate is also supported by industrialized agriculture, as that provides the food that it eats.

I really hope y’all all have functional vegetable gardens to fall back on.