U.S. farmers are facing one of their toughest planting seasons in years as escalating oil and transport costs from the Iran conflict doubled fertilizer prices and squeeze margins across the Midwest.
Since the conflict erupted in late February, much of the economic pain has come through the weeks of uncertainty along the Strait of Hormuz, a vital chokepoint through which a considerable share of the world's oil, liquefied natural gas, and fertilizers are transported.
In South Dakota, prices for items such as fertilizer and fuel have approached nearly double levels, influenced by factors including geopolitical tensions involving the Middle East crisis and continued cost increases.
Mike McCraine, a fourth-generation farmer in South Dakota, said his farm has been relatively stable due to earlier procurement of key inputs. However, he warned that farms without earlier reserves are facing significant difficulties.
"Actually we are in a pretty solid situation right now for us, because we do a lot of pre-ordering. We had all our fertilizer already pre-bought before this event in Iran hit. And so consequently we don't have to pay the high price right now. Some of this fertilizer has almost doubled. I did have to lay in some fuel the other day," the farmer said.
According to the 2026 income forecast recently released by the U.S. Agriculture Department (USDA), net farm income across the country is expected to decline by nearly 25 percent compared to three years ago.
Mike McCraine’s two sons, Matthew and Mitchell, have recently stepped in as the fifth generation on the family’s South Dakota farm. Yet Matthew says the surge in agricultural costs tied to the Iran conflict is already straining many operations. As part of the new generation, he feels the weight of unprecedented pressure as input prices climb.
"I mean there was a slight increase even in the seed. But yes, fertilizer, fuel, I mean all of that has had an increase going into this year and even throughout the winter months, depending on when you may or may not have got stuff booked or bought up to go into this planting season. Whether you did or didn't, it's all going to have an effect on the the input I guess for the year," Matthew McCraine said.
According to the latest agricultural survey report, the agricultural situation in some traditional farming regions of the American Midwest, such as Nebraska and Kentucky, has been grim in recent years. The number of farms filing for bankruptcy has risen year by year, with the highest concentration found in the the American Midwest's soybean and corn belt.
"You know, I think if my sons wouldn't have had me already established, I don't know if they could have started farming on their own, it might have been really, really difficult," Mike McCraine said.
US farmers face soaring costs as Iran war squeezes agriculture sector
US farmers face soaring costs as Iran war squeezes agriculture sector
