30 / SEEDWORLD.COM OCTOBER 2026 Meanwhile, the Russian invasion of Ukraine has intensified, contributing to the closure of the Kerch Strait, while hopes for normalized shipping through the Strait of Hormuz have faded. Together, those developments have renewed uncertainty across two of the world’s most important trade corridors for agricultural commodities and energy. For the seed industry, this uncertainty extends far beyond fertilizer markets. It complicates production planning, inventory decisions and long-term investments while increasing demand for genetics that help growers produce more with fewer inputs. Why Fertilizer Volatility Extends Beyond the Farm While it is too early to know exactly how these developments will affect fertilizer prices, an extended period of geopolitical instabil ity would likely trigger another sustained cycle of higher prices. The United States has reportedly made progress toward nor malizing trade relations with China, but several risks remain. China depends heavily on imported Russian oil and wheat, and chang ing geopolitical conditions could prompt it to once again restrict fertilizer exports or other key agricultural commodities. The broader point is that escalating geopolitical instability disrupts fertilizer trade, reduces crop production in vulnerable regions and fuels food inflation. Throughout history, those pres sures have often contributed to economic instability, civil unrest and broader geopolitical conflict. prices spike. If growers reduce acreage in those crops, seed com panies with significant exposure to those markets could experi ence lower unit sales. Farmers also tend to scrutinize every input when margins tighten. Some may choose lower-cost seed options, creating additional pricing pressure for seed companies while compress ing margins across the industry. Seed production itself also becomes more expensive. Producing seed requires growing crops, and those production acres face the same fertilizer costs as commercial growers. As fertilizer prices rise, seed production costs increase while profit ability becomes more difficult to maintain. Innovation Becomes the Competitive Advantage While higher fertilizer costs create challenges, they also create opportunities for the seed industry. Growers facing tighter margins will increasingly look for hybrids and varieties that deliver stronger yields with fewer inputs. Seed companies that can accelerate the development of genetics with improved nutrient-use efficiency, drought tolerance and overall resilience may be better positioned as growers adjust to a higher-cost production environment. The challenge extends beyond the products themselves. Seed companies will also need to evaluate where and how they pro duce seed. Rising fertilizer costs, combined with ongoing geopo litical uncertainty, could make production planning more complex while increasing pressure on margins. The industry’s response may also include rethinking supply chains. Recent events have highlighted the risks of relying too heavily on global fertilizer markets. Where practical, strengthen ing domestic or North American fertilizer production and sourc ing could help reduce exposure to future supply disruptions and provide greater long-term stability for agriculture. A Different Operating Environment The broader shift may be less about temporary disruptions and more about a new operating environment. The highly globalized agricultural system that existed before COVID is giving way to one that places greater emphasis on regional production, supply chain resilience and self-sufficiency. That transition will not happen overnight, but it is already influ encing how governments, agricultural suppliers and food pro ducers think about long-term risk. For the seed industry, adapting to those changes may become as important as responding to the next growing season. This does not mean the future is bleak. It means the rules are changing. Companies that invest in genetics capable of produc ing more with fewer inputs will likely be better positioned if ferti lizer remains expensive and less predictable. Technologies such as artificial intelligence can help accelerate breeding and improve efficiency, but the ultimate advantage will come from deliver ing practical solutions that help growers remain productive in a higher-cost, more volatile world. In that environment, seed innovation becomes more than a competitive advantage. It becomes part of agriculture’s long- term resilience. SW … escalating geopolitical instability disrupts fertilizer trade, reduces crop production in vulnerable regions and fuels food inflation. Those conflicts are expensive. Governments typically finance them by borrowing, even as many countries already carry historically high debt levels. Increased borrowing or monetary expansion can add inflationary pressure by increasing the money supply while essential goods become more difficult to produce and transport. As inflation rises, interest rates often follow. Higher borrowing costs place additional pressure on government budgets and can create a cycle in which inflation, debt and geopolitical instability reinforce one another. Fertilizer shortages play an important role because they directly influence global food production. For seed companies, this environment changes more than input costs. It influences what farmers plant, how much risk they are willing to take and which seed technologies deliver the great est value under tighter economic conditions. Changing Farmer Economics Changes Seed Demand So, what does all of this mean for the seed industry? Periods of sustained fertilizer inflation inevitably influence planting decisions. Crops such as corn and rice require relatively high fertilizer inputs, making them more vulnerable when fertilizer
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