American grain farmers are facing what industry representatives describe as their worst financial crisis since the 1980s, as disruption from the Iran conflict drives up diesel and fertiliser costs. The Financial Times, cited by RT, reports that growers of nine major US crops could collectively lose around $31 billion this year without federal assistance.
INR Report: Based on reporting by RT, citing the Financial Times, HERE.
The economic consequences of the Iran conflict are spreading well beyond the Middle East, with American grain farmers now confronting sharply higher production costs at a time when many were already struggling with weak crop prices and declining farm incomes.
RT, citing reporting by the Financial Times, says farmers across the US Corn Belt have been particularly affected by increases in diesel and crop nutrient prices since the military campaign against Iran began in February.
Nebraska Farmers Union president John Hansen described the downturn as the industry's worst since the 1980s.
The immediate pressure comes from two inputs modern agriculture cannot easily avoid: fuel and fertiliser.
Hormuz Disruption Hits the Farm Gate
According to the report, the US-Israeli attack on Iran in February was followed by Tehran largely blocking commercial shipping through the Strait of Hormuz.
The Strait is one of the world's most important energy corridors and, before the conflict, handled roughly one-fifth of global energy supplies, according to the figures cited in the report.
Disruption to that trade has pushed energy prices higher.
For American farmers, one of the most visible consequences has been diesel.
RT reports that the nationwide average diesel price has risen from around US$3.81 per gallon before the war to approximately US$5.45.
That matters enormously in agriculture. Diesel powers tractors, harvesters and other machinery and is also embedded in transport costs throughout the agricultural supply chain.
The problem becomes still larger when fertiliser is included.
Natural gas and global energy prices are important components of fertiliser production and transportation, leaving farmers exposed when international energy markets are disrupted.
Nebraska corn and soybean farmer Matt Bailey told the Financial Times that a phosphorus-rich fertiliser he uses at planting now costs more than US$900 per ton, compared with roughly US$470 a decade ago.
“Inputs are way out of whack,” he said.
$31 Billion in Projected Crop Losses
The latest energy shock has arrived after several already difficult years for American crop producers.
Economists at the American Farm Bureau Federation estimate that growers producing nine major crops could collectively lose approximately US$31 billion in 2026 without federal assistance, according to the report.
The situation is projected to deteriorate further in 2027, when losses could reach US$32 billion.
Corn growers are reportedly facing projected losses of US$131 per acre this year, increasing to US$167 per acre in 2027.
Soybean producers are forecast to lose US$80 per acre this year and US$138 next year.
Pam Johnson, a former president of the National Corn Growers Association, told the Financial Times that uncertainty created by the Iran conflict had made planning increasingly difficult.
She said projections suggested farmers may struggle to make money for the next two years.
Trade Pressures Add Another Problem
Energy prices are not the only cause of the agricultural downturn.
Farmers cited by the Financial Times also blame Washington's trade disputes for weakening overseas demand, particularly Chinese demand for American soybeans.
That creates pressure from both directions.
Farmers face rising costs for fuel and fertiliser while potentially receiving weaker prices or losing access to important export markets for the crops they produce.
The Trump administration has already sought additional taxpayer support for the sector.
According to the report, the administration asked Congress in June for another US$11 billion in agricultural assistance, following billions of dollars in previous support payments.
The scale of those interventions illustrates how geopolitical policy can eventually become a domestic fiscal issue.
Higher energy costs and disrupted trade do not remain confined to international markets. They can eventually appear in farm balance sheets, government subsidies and consumer food prices.
Weather Adds to the Pressure
Drought and unusually hot conditions have further complicated the situation across sections of the Corn Belt, including Nebraska.
Crop damage has prompted traders to reduce estimates for this year's harvest, contributing to higher corn prices. Soybean and wheat prices have also risen.
That creates another economic tension.
Higher commodity prices may eventually provide some relief for farmers receiving more for their crops, but they can simultaneously increase costs further along the food supply chain.
The report notes concerns that higher agricultural commodity prices could therefore contribute to inflation, which remains above the US Federal Reserve's 2 percent target.
The result is a complicated cycle in which war, energy, fertiliser, trade, weather and monetary policy increasingly intersect.
Agriculture’s Exposure to Global Energy
The American experience demonstrates just how dependent modern food production remains on energy.
Large-scale agriculture requires enormous quantities of diesel, fertiliser, transportation and machinery.
That means an energy disruption thousands of kilometres away can eventually alter the economics of planting corn in Nebraska or soybeans elsewhere in the Midwest.
The Strait of Hormuz is therefore not simply an oil-market issue.
When energy moving through the Gulf becomes constrained, the effects can eventually travel through fertiliser plants, transport companies, farms, supermarkets and household food bills.
For countries dependent on imported fuel, that chain of exposure deserves particular attention.
Does This Affect New Zealand?
Potentially, and the US experience provides a useful warning for New Zealand.
New Zealand agriculture is different from the grain-intensive farming system of the American Midwest, so the financial figures reported from the United States should not be directly applied here.
But New Zealand remains dependent on imported refined petroleum products, including diesel, while agricultural production also relies on fertiliser, transport and international shipping.
That creates exposure to many of the same global energy pressures.
The issue is especially relevant as New Zealand considers fuel security and storage capacity following the closure of refining operations at Marsden Point.
More domestic fuel storage can provide a larger buffer against temporary disruption, but storage does not eliminate exposure to international fuel prices or restore domestic crude-oil refining capability.
The American farming crisis also demonstrates something broader: energy security and food security are closely connected.
When diesel and fertiliser become significantly more expensive, the effect does not stop at the farm gate. Production costs can move through transport, processing and retail before eventually reaching consumers.
For New Zealand, a useful measure of resilience therefore goes beyond whether fuel is physically available.
The more important questions are how long essential agricultural and freight operations could continue during a serious international supply disruption, what replacement supplies would cost, and how rapidly those costs would flow through to food production.
The crisis confronting American farmers is consequently worth watching from New Zealand.
It shows how quickly a geopolitical conflict centred on one of the world's major energy corridors can become an agricultural, inflation and household-cost problem thousands of kilometres away.
Source
RT, 26 August 2026
Iran war drives US farmers into worst crisis in 40 years – FT
Underlying reporting cited by RT: Financial Times
Independent reporting. Original context. Credited sources.