A severe supply shock from Middle East conflict has sent prices for key feed and farm inputs soaring. While core ingredients like corn and soybean meal remain relatively steady, unprecedented cost pressures for vitamins, amino acids, and energy threaten global supply chains. Rising uncertainty and shrinking margins now loom over producers worldwide.
Vitamins, amino acids, minerals, organic acids and other feed and farm inputs are experiencing unprecedented price spikes, risk premiums and spreads, and limited market liquidity amid a Middle East-induced supply shock. As the conflict endures, producers are conducting ongoing impact assessments and expressing growing concerns about the market’s volatility. Although key macro feed ingredients such as soybean meal, feed wheat, and corn have remained relatively stable in the US, China, and Europe, they may soon face upward pressure as increased fertiliser and herbicide costs filter through the supply chain.
Suppliers adjust to volatility
Suppliers have responded to mounting volatility by retracting offers or issuing quotes with limited validity, and some have even shifted from quarterly to monthly contracts to better manage exposure to input and freight risks. Methionine prices have soared over 120% year-to-date, following Evonik’s force majeure declaration in early March after propylene supplies were disrupted at its Singapore facility; MHA prices have surged in parallel. Other feed additives have also seen dramatic increases, with Vitamin E 50% and calcium pantothenate up over 50% year-to-date, Vitamin B5 offers rising from pre-conflict levels of US$5 to range between US$8 to above US$12, and Vitamin A up more than 30% to around US$20, further pressured by BASF’s 10-week scheduled shutdown and some offers reportedly reaching the mid-20s.
Historic Middle East disruptions have unleashed record price spikes and volatility in feed and farm input markets worldwide, threatening supply chains, tightening producer margins, and placing the global food supply under severe pressure.
Feed additives face supply crunch
For Vitamin B3, a structural surplus of pyridine had already driven 3-picoline prices up more than 30% in China even before the conflict began. Choline chloride, which relies heavily on ethylene oxide and TMA, has seen price increases in line with its upstream chemicals. Market participants are also raising concerns about Vitamin E, noting that output of key feedstocks like m-cresol has fallen sharply—prompting fears that, if the conflict escalates, prices could revisit the peaks seen in 2008.
Rising costs hit amino acids
On the amino acid side, chemical-based products face input price volatility and sourcing uncertainty, while fermentation-based products such as lysine and threonine are exposed through rising energy and corn costs. Multiple producers including Eurolysine and Eppen raised reference prices by mid-March, citing cost pass-through. Phosphates and minerals exposed to sulphur or energy-intensive production have also risen significantly.
Corporate actions reshape the market
Recent corporate developments reflect the sector’s rapid adaptation to market pressures. BASF has raised prices for formic acid, amines and other products, while Wanhua and Sumitomo have declared force majeure across their petrochemical chains. Investments and strategic shifts are also underway, with Jefo committing CA$256m to capacity expansion, Denkavit and Adisseo announcing a BeNeLux distribution partnership, and Syngenta closing its only paraquat facility. Meanwhile, current vitamin market dynamics may benefit CVC’s acquisition of dsm-firmenich’s former Animal Nutrition & Health unit. On the production side, China’s Yuwan commissioned a new 250,000 t/a lysine plant, and companies such as ADM, Trouw and others opened new premix plants. Additionally, a new US EPA biofuel policy is set to curb demand for agricultural goods over 2027 and 2028.
Iran attacks trigger unprecedented supply shock
What began as a confrontation escalated into a full-scale war on 28 February 2026 – lasting more than 3 times longer than the mid-2025 12-day attacks – and has become the most significant geopolitical shock to energy markets since the 1990 Gulf War. With roughly 20% of global oil supply now disrupted, the scale of lost barrels and lack of spare capacity is unmatched since World War II. The closure of the Strait of Hormuz has sent shockwaves through commodity, chemical, and agricultural supply chains, upending markets with unexpected speed.
Energy and feedstock prices surge
Energy prices and key feedstock including urea, sulphur, gasoline and diesel have risen significantly. Both the US Fed and ECB have held rates steady, cautious as the supply shock complicates the inflation outlook. USD/CNY is hovering around 6.91.
Global LNG and supply chain ripple effects
LNG shipments through the Strait account for around 20% of global LNG trade, though this represents only about 3% of total worldwide natural gas production. Even so, the loss of this supply has been enough to push LNG prices higher in Europe and Asia, where marginal changes set commodity prices. Countries such as Singapore, Japan, South Korea, and the Philippines are especially vulnerable due to their high dependence on imported oil, gas, and energy, prompting airlines, corporations, and governments across Asia to announce curtailment measures. While China’s reliance on coal, domestic gas, and Russian crude leaves it somewhat less exposed, its significant feedstock demand from the region still presents a risk to global ingredients markets if production slows further.
Fertiliser, agriculture and economic impact
The Middle East accounts for about 43% of global urea supply, 44% of sulphur and 27% of ammonia, inputs critical to fertiliser production. Attacks on Iran’s South Pars gas field and Qatar’s Ras Laffan LNG facility have directly disrupted key feedstock flows. More than 40 force majeure declarations were recorded across global petrochemicals supply chains as a result. Insurance and bunker surcharges are adding to delivered costs, while Gulf countries have opened alternative landside cargo routes. The region is also an important trade partner for grains and proteins, for instance, Iran is Brazil’s largest corn buyers.
Fertiliser, agrochemicals, energy and fuel collectively account for roughly 20 to 40% of farmers’ operating costs, with feed costs representing similar or even higher shares for livestock farmers. Fertiliser cost inflation threatens farm-gate margins during the coming planting season. Unlike the 2022 Ukraine shock, crop prices have not risen in parallel to offset input cost pressure, raising the risk of reduced fertiliser use, lower yields and quality content in feed ingredients.
Uncertain resolution and market outlook
Markets have grown increasingly pessimistic about a rapid resolution. Peace talks and escalation are alternating in real time. The War Powers Act deadline and approaching mid-term elections represent potential catalysts for a resolution sought by summer, beyond the 4-8 weeks initially circulated by US officials. However, consensus is that any prolonged conflict and accumulated infrastructure damage may take months or years to rebuild.
Feed Outlook: Growth beyond the crisis
The upcoming Kemiex Feed Consumption Report which analyses feed demand across more than 100 countries through 2031, projects approximately 1.5% annual growth over the coming 5 years, as the world needs to be fed.
The structural picture is one of divergence. South Asia leads with a projected CAGR of 3.2%, followed by Latin America at 2.3%, both driven by rising protein consumption, aquaculture expansion and investment in industrial-scale production.
In absolute terms, the largest incremental growth will come from China, Brazil, the United States, Vietnam and India. China and the United States remain the 2 largest markets by volume, both growing below 2% annually as they approach maturity. Europe shows the slowest expansion at a projected 0.2% CAGR, with France, Germany and the Netherlands expected to register negative growth, driven by declining livestock numbers, sustainability constraints and demographics.
