JPMorgan is warning that a global food crisis could emerge as soon as next year, driven by a fertilizer supply shock the bank says has no equivalent safety net to the strategic reserves that exist for oil. "Unlike oil, there is no strategic reserve for fertilizer," trading and research account Bull Theory noted, pointing to the bank's latest sustainability research.
The warning comes from a JPMorgan report titled "Food Security Is National Security: A Compounding Storm," led by senior global economist Nora Szentivanyi. The bank frames the risk through what it calls the "Five Ws" — War, Weather, Warehousing, Water and Waste — and identifies fertilizer, specifically nitrogen-based urea, as the most immediate vulnerability in the chain.
Why the Strait of Hormuz matters to your grocery bill
According to JPMorgan's own published analysis, more than 36% of the world's urea supply is shipped from the Persian Gulf, and disruption around the Strait of Hormuz has already begun constraining that trade. Nitrogen fertilizer accounts for roughly half of global demand across three staple crops — 20% for maize, 18% for wheat and 16% for rice — and typically makes up 21% of production costs for corn and 19% for wheat. The timing risk compounds the supply risk: urea has to be applied during planting, not afterward, meaning even a temporary shortfall during the September planting window can't simply be made up later in the season.
JPMorgan projects global food inflation accelerating from 2.8% in the first half of 2026 to roughly 5% in the first half of 2027, driven by the combination of the fertilizer squeeze and a forecast "super El Niño" peaking in winter 2026 that threatens crop yields across the tropics. The bank flags Brazil, India, China, Bangladesh, Vietnam and Indonesia as the major importers most exposed to Persian Gulf fertilizer disruption, with India singled out for its history of imposing export bans during past supply crises.
No strategic reserve to fall back on
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The absence of a fertilizer equivalent to the U.S. Strategic Petroleum Reserve is central to why JPMorgan expects this shock to persist rather than pass quickly. The bank notes that stockpiling nitrogenous fertilizer at scale isn't practical the way it is for oil, given the instability of ammonia and the logistics of long-term storage — meaning that once supply is disrupted, there's no buffer to smooth prices while production capacity recovers. JPMorgan estimates that fully restoring fertilizer production capacity could take one to four years, with natural gas facility repairs — since synthetic nitrogen production depends on natural gas feedstock — potentially taking three to five years including well damage.
For markets already contending with elevated bond yields and slowing consumer spending, a sustained rise in food inflation adds another variable to an already stretched macro picture, with the bank's own timeline suggesting the pressure builds through 2027 rather than resolving quickly.
