On March 18, 2026, the feed production system in Iran maintains its operational capacity at 100% despite the Gulf conflict and supply chain disruptions. This protocol, described by Majid Mofav Ghadiri, president of the Iranian Feed Producers Association for Poultry and Aquaculture, represents a buffer mechanism that contrasts with structural vulnerability forecasts.
“The role of feed producers in this situation is hard to overestimate,”
declares Ghadiri, highlighting a resilience strategy based on a combination of installed overcapacity (25% above demand) and a network of suppliers located within 300 km of production centers.
The contradiction emerges when comparing this physical stability with economic projections. WEB_DIGEST data indicate that the shutdown of seven urea plants in Iran (8.9 million tons annual capacity) has already pushed fertilizer prices from $350 to $410/ton. This scenario highlights a paradox: while feed production holds steady, the agricultural system feeding it shows signs of stress.
In 2025, the global vitamin market saw a 12% price increase, with Vitamin E 50% experiencing an 18% rise in six months. These figures, recorded by STREAM_A, reveal hidden tension in the system. While Iranian feed producers maintain production, their marginal costs are growing exponentially. The sector’s buffer capacity relies on a strategic reserve model of raw materials (wheat, soybeans, corn) covering up to 90 days of production, but this mechanism requires an initial investment of $250 million for storage structure maintenance.
The contrast between this physical overcapacity and the growth in logistics costs (which have increased by 22% in Q1 2026) generates operational leverage. Feed producers are transferring 35% of cost increases to end consumers, but the remaining 65% is absorbed through liquidity reserves usage. However, this model is not sustainable long-term, as shown by automotive sector data (STREAM_B), where Gulf disruption has already caused a 15% increase in production costs.
WEB_DIGEST reports that the forced closure of seven urea plants in Iran has reduced global productive capacity by 7%. This event represents a critical transition point for the food system. If the conflict persists, the buffer capacity of the Iranian feed sector could be compromised within 90 days, considering that fertilizer reserves cover only 45 days of production. The key question is: at what point does installed overcapacity become an unsustainable financial burden?
STREAM_A data indicate that feed producers have already reduced inventory turnover from eight to five times per year, a signal that the system is adopting a resource conservation strategy. However, this reduction diminishes the capacity to respond to potential demand shocks, creating informational asymmetry between the market and production structures.
The analysis reveals an overlooked operational lever for asset managers: the ratio of storage capacity to withdrawal rate. Each percentage point increase in the withdrawal rate reduces buffer capacity by 15 days, a factor that could generate an economic impact of $12-15 million within 90 days. Additionally, the informational asymmetry between the global fertilizer market and the Iranian production system represents a risk of overestimating resilience.
In my view, this analysis demonstrates that the apparent stability of the Iranian feed sector is not an error but a calculated strategic choice. However, this strategy requires continuous monitoring of reserve withdrawal rates and precise evaluation of the equilibrium point between installed capacity and marginal costs. In times of crisis, resilience is not a static quality but a dynamic process requiring active management of informational asymmetries.
Photo by Ales Krivec on Unsplash
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