WEST LAFAYETTE, INDIANA (RFD NEWS) — The Consumer Price Index was released on Friday morning, showing inflation rose 0.9 percent in March. That figure came in line with expectations. Year over year, inflation is up 3.3 percent, slightly below previous estimates. Energy costs, particularly gasoline, were a major driver of the monthly increase.
It is important to note that this report does not reflect the impact of the conflict with Iran or recent fuel market volatility. Those effects are expected to show up in next month’s data.
Especially since farm input costs continue to rise faster than general inflation, adding pressure to producer margins heading into the 2026 growing season. Analysis from Purdue University shows agricultural input prices have increased at a higher long-term rate than overall inflation, with recent trends widening that gap.
Since the 1970s, farm input prices have risen about 4.1 percent annually, compared to 3.4 percent for general inflation. The relationship is linked but inconsistent, with input costs often exhibiting greater volatility. Labor and machinery costs tend to track inflation more closely, while inputs like fertilizer and fuel are more influenced by supply-and-demand shocks.
Recent data highlights the pressure. Overall farm input costs rose more than 10 percent over the past year, far exceeding general inflation near 3 percent. Fertilizer, diesel, and feeder livestock prices were major drivers, with nitrogen and fuel costs rising sharply.
These higher costs are already impacting breakeven levels and could influence 2026 acreage decisions, particularly for crops with higher input requirements.
The ceasefire between the U.S. and Iran remains in place for now, but uncertainty surrounding the Strait of Hormuz continues to rattle global markets—especially for agriculture.
Commercial traffic through the critical shipping lane remains limited, with only a small number of vessels reportedly allowed to pass. Economists and analysts say the situation is far from resolved, and volatility in energy and fertilizer markets is likely to persist. Farm Bureau economist John Newton says the next two weeks will be critical in determining whether the ceasefire leads to longer-term stability.
“All eyes are going to be on the progress over the next two weeks to see if the progress made was in the right direction,” Newton explains. “Obviously, the oil market moves very quickly. We saw how the oil market moved in response to this news.”
Despite the pause in fighting, diesel prices remain elevated. Analysts at GasBuddy expect some relief, but Newton warns it will not happen overnight.
“When the Strait of Hormuz closed, we saw the most rapid increase in diesel prices in history, which farmers are paying,” says Patrick De Haan. “So, these markets are incredibly volatile. But again, the supply and demand factors on the ground are going to be what ultimately drive the prices that consumers pay, and farmers pay.”
Vice President JD Vance is expected to meet with Iranian officials in Pakistan this weekend to negotiate a more permanent agreement. Still, analysts caution that even if the ceasefire holds and shipping resumes, the financial damage to U.S. producers may already be significant.
Market analyst Brian Hoops tells RFD NEWS that traders aren’t holding their breath right now, and ongoing confusion over access and compensation for vessels passing through the strait is a further complication.
“The deal that we have with Iran is fragile at best right now,” Hoops says. “There doesn’t sound like there was really any conflict or bombings overnight, but that strait is not completely open. Iran was refusing to allow any vessels to pass. It sounds like up to 15 can pass, but they want to be compensated for it. So there are a lot of deals to iron out between President Trump and Iran’s representatives. And then you have some issues with Israel and Lebanon. And so there are a lot of things in the mix in here. We’re far from a completed ironclad agreement. There’s going to be some backfill here, I think, in the crude oil market, up in that $100 range.”
Fertilizer shipments are also caught in the bottleneck. StoneX analyst Michael Castle says they are concerned about the long-term impact of the prolonged closure.
Despite the demand, that shipping route remains largely off-limits to commercial traffic, with dozens of fertilizer ships lined up, waiting for their turn. Economists say ships carrying about 931,000 metric tons of urea, phosphate, ammonia, and sulfur are in the queue. Some vessels are getting the green light, but ship owners remain cautious.
Even if the corridor fully reopens, Castle warns oil shipments will likely take priority, delaying fertilizer deliveries even further: “22 urea vessels, 11 sulfur vessels, 6 phosphate vessels, and four ammonia vessels actively loaded behind the strait. So obviously, just the simple fact of getting that to the market is going to be a very welcome development on the front-end supply situation, especially with India tendering right now. But I would say the longer-term thing we still need time to assess is how much damage has been done, especially in the downstream markets here. We’re talking about the LNG. Reliance on imports for other producers. So there are still some issues. I think you’ll see some longer-term production problems because of the impact.”
University of Illinois economist Dr. Gary Schnitkey told RFD NEWS that the ripple effects could extend well into the next growing season, particularly for nitrogen-based fertilizers.
“We think this is going to persist into the fall, but we can particularly see the nitrogen side going up,” Schnitkey explains. “What’s going to be interesting is to see what happens to sulfuric acid. Potash may be somewhat sheltered from these increases. Urea is not. Urea is particularly one that is imported from the Middle East, and that has seen our largest increase.”
Adding to supply concerns, The Mosaic Company has announced it is idling two phosphate facilities in Brazil, a move expected to reduce global supply by roughly one million tons.
“American farmers depend on a strong domestic fertilizer industry, which in turn depends on strong enforcement of U.S. trade laws that ensure a level playing field,” The Mosaic Company said in an official statement to RFD NEWS. “Mosaic is proud to support U.S. agriculture with high‑quality, reliable products produced here at home.”
While the ceasefire offers a glimmer of hope, analysts say markets remain highly sensitive to geopolitical developments. For now, farmers and ranchers are bracing for continued volatility in fuel and input costs as the situation unfolds.
Calls are growing to restore balance in fertilizer markets as countervailing duties on imports of Moroccan phosphate undergo a sunset review. Agricultural groups are urging the International Trade Commission to revoke the duties, arguing they are increasing costs for producers.
American Soybean Association (ASA) President Scott Metzger joined us on Friday’s Market Day Report with an update on the issue.
In his interview with RFD NEWS, Metzger discusses U.S. farmers’ reliance on global fertilizer markets and explains how duties on phosphate imports from Morocco and Russia are impacting soybean producers. He also outlines potential actions to lower input costs and improve fertilizer availability.
Metzger also addresses industry efforts to push for revoking the duties, including a coalition of state and national ag groups, and whether there has been any response. Metzger also highlights what is at stake if the duties remain in place.
Finally, with spring planting underway, he shares his outlook for the season and what he’s hearing from farmers in his region about current conditions.
