Why Agribusiness Merits More Attention After the Iran Shock

When Tehran closed the Strait of Hormuz in retaliation for the US and Israeli strikes on Iran of 28 February, the world's attention focused on soaring energy prices. Just as critical, though, was the impact on fertilizer supplies – the strait is the key shipping route for fertilizer exports from the Middle East.

The World Bank Group’s fertilizer price index rose more than 12% in the first three months of 2026¹. By April it had reached its highest level since October 2022, mainly as a result of the export disruptions.

The potential knock-on effect of limited fertilizer supplies and higher prices highlighted not just the delicacy of global food chains but also the need for an innovative agribusiness industry to make farms more productive. As the world’s population increases and gets wealthier, agriculture must rapidly meet a burgeoning demand for food. It must also become more resilient.

Agribusiness is a vast industry improving agricultural productivity, boosting the world’s food supply and building resistance to shocks such as the closure of maritime choke points. It is also enormous. Valued at USD 3.4 trillion in 2024, the global agribusiness market is forecast to reach USD 4.4 trillion by 2033 – one of the largest industries in the real economy². The sector compounds steadily rather than spectacularly; the interesting part is how unevenly that growth is distributed across segments (see chart below).

Forecast revenue CAGR by agribusiness segment, 2026-2031

Source: Mordor Intelligence (2026), Fertilizers market and Agricultural machinery market; MarketsandMarkets (2026), Specialty fertilizer market; Precedence Research (2026), Precision farming market; The Business Research Company (2026), Precision agriculture global market report.

The diverse industry typically includes seeds, crop-protection products and fertilizers used to raise crop yields; precision farm machinery and irrigation equipment; grain storage, processing and trading infrastructure; veterinary and animal-health products; and the distribution channels that carry food, feed and fiber to end markets.

The mathematics of food’s looming demand and supply mismatch are stark. In the next 60 years or so, the world population is forecast to increase by roughly a quarter, from 8.2 billion in 2024 to 10.3 billion in the mid-2080s, according to the UN’s latest estimates³. India and Southeast Asia are fueling the growth, with young populations developing a taste for higher calorie livestock products.

But the amount of agricultural land has stalled since the beginning of this century⁴. Meanwhile, the wild is a diminishing source of food. For instance, aquaculture has overtaken fishing as a source of seafood.

Agribusiness’s fastest-growing area is precision agriculture, with an estimated annual growth rate in market size of 13% from 2026 to 2035⁵. As farmers strive to produce more food with less land, they’re monitoring the crop health, soil condition and weather using data and AI. They’re also beginning to deploy satellite-guided machinery that sows, sprays and harvests 24 hours a day.

Global Precision-Farming Market

Source: Precedence Research. (2026). Precision farming market size, share, and trends 2026 to 2035

Fertilizers are a mature part of the industry, with demand growing more predictably. Supply, though, is unusually exposed to the Middle East: much of the world's nitrogen fertilizer is produced in the Gulf, where cheap natural gas serves as both feedstock and fuel, and close to a third of global seaborne fertilizer trade – roughly 16 million tonnes a year – normally transits the Strait of Hormuz¹.

That combination of scale and vulnerability is itself a driver of growth elsewhere in agribusiness. When nitrogen is cheap and dependable, applying it generously is rational. When it is expensive and uncertain, every kilogram has to work harder – and the tools that make it work harder become much easier to justify. Suppliers of variable-rate application, soil sensing and drone-based crop analysis report exactly that shift in demand since prices began climbing⁶.

Optimizing the efficiency of the world’s farms through agribusiness innovation, including greater use of precision agriculture – a trend that’s just beginning – will help to make fertilizer supplies stretch further. The transition will not be frictionless: higher input costs also compress the farm incomes that fund new equipment, and adoption still skews heavily towards larger operations with the balance sheets to invest. More importantly, agribusiness looks set to transform the efficiency of a sector that’s seen little innovation for decades.

Rising global appetite for food, finite farmland and a low base of technological adoption — these three factors add up to durable demand against a physical constraint, with a long runway for efficiency gains. That is what makes agribusiness a long-term theme worth following.