NASHVILLE, TENN. (RFD NEWS) — Energy market volatility is driving grain and oilseed prices and reshaping 2026 planting decisions. Tanner Ehmke, an economist with CoBank’s Knowledge Exchange, says rising input costs and shifting price signals are pushing producers toward soybeans and away from corn and wheat.
Soybean acreage is expected to increase, while corn and wheat acres decline. Soybean prices rose nearly 12 percent in the first quarter, supported by strength in soybean oil and biofuel demand. Corn prices gained about 4 percent, while wheat posted a stronger rebound of more than 20 percent.
Higher fertilizer costs are a key factor. Corn remains more input-intensive, reducing its profitability compared to soybeans. At the same time, corn demand remains strong, supported by record exports and steady ethanol use.
Soybean exports have lagged, particularly to China, but domestic crush is accelerating. Wheat markets face additional pressure from the expansion of drought across key growing regions.
Looking ahead, weather and global energy markets will continue to influence both prices and acreage decisions.
As geopolitical tensions continue, we are looking at their ongoing impact on agriculture – on Monday at 10 AM ET, the U.S. will begin its blockade of the Strait of Hormuz, with the U.S. military blocking traffic entering and leaving Iranian ports. The announcement from President Trump came as weekend talks broke down at the 11th hour.
Crude oil is responding, with WTI surging over $100 a barrel. Fuel prices are also up.
Fertilizer Company Fires Back on Rising Prices
While the U.S. does not rely on oil passing through the Strait, we do rely on fertilizer shipments.
President Trump says his team is watching those prices closely. In a post on social media, he says the administration will not accept price gouging from what he calls the “fertilizer monopoly,” noting he has the backs of America’s farmers.
Shortly after Trump’s message, global fertilizer giant The Mosaic Company made a post of its own. While Mosaic did not mention the President’s message directly, it said, in part:
“Global fertilizer prices are shaped by a wide range of well-documented market factors, including global supply and demand dynamics, energy costs, weather and crop forecasts, transportation constraints, and geopolitical conditions. These forces, not individual producers, drive the pricing of phosphate and potash fertilizer products.”
These added costs are putting a lot of pressure on growers firing up the planters this week. Kansas farmer and friend of RFD NEWS, John Jenkinson, told us that farmers are doing whatever they can to try to remain profitable.
“Big concerns about input costs this year, and that seems to be the common thread through all of this -- diesel prices are up in the $4 range; for farm diesel, in the upper $3 range -- that’s caused some concern,” Jenkins explains. “Fertilizer costs, that’s a big issue. Everybody’s watching these crop prices and hoping for the best, but everybody that I’ve talked to said, ‘You know, we’re going to do everything we can to put more money back on the bottom line.’”
Even if the Strait of Hormuz fully reopens without restrictions, experts warn that it will take some time for fuel prices to return to prior levels.
“So, farmers are going to be stuck kind of paying higher diesel prices this year. My analysis of a Kansas grain farm showed that they spent about $30,000 last year, you know, based on the current diesel price,” explains K-State University Ag Economist Greg Ibendahl. “You could easily add another $18,000 per grain farm just from the diesel side. Assuming most farmers actually have their fertilizer booked, that’s not going to be such a big deal this spring -- but certainly going into wheat planting season in the fall and even in the next year, when farmers do like to buy their fertilizer in the fall. So, you know, 2027 is really not shaping up to be a very good year right now.”
As we have learned, fuel prices are highly responsive to market movements, but that is not always the case for fertilizers. Jenkinson told RFD NEWS that he worked ahead at his operation just in case something like this unfolded.
“We had some locked in way back in October. We used up some of that. We put down a little bit more than we thought we would,” he shared. “We tried to fertilize some wheat to get maximum yield this year. And so, we needed to add a little bit and buy just a little bit more, and it was at a higher price. So, it just depends on what farmers were doing at the time, if they decided to go ahead and up their fertilizer program a little bit. Nonetheless, that higher fertilizer cost is going to really pinch things until we can get the fertilizer price back down.”
Most fertilizer prices are up double digits from this time last year. Urea is seeing the largest gains, tracking up 34 percent from just last month.
Energy Impacts Hit Specialty Crops and Canadian Farmers
Farmers across the U.S. are under immense pressure lately, and specialty crop growers are no exception.
The Georgia Fruit and Vegetable Growers Association is putting the spotlight on trade as farmers explain what they’re up against. Produce is big business in Georgia, with the USDA reporting that there are around 3,000 to 4,000 farms there dedicated to specialty crops.
While U.S. farmers wait for fertilizer shipments to pass through Hormuz, Canada is waiting as well.
“In Ontario, we don’t manufacture very much nitrogen fertilizer. We have one nitrogen fertilizer plant,” explains Peter Johnson. “That is not enough nitrogen to meet provincial demands. And we don’t have the storage capacity in Ontario to have all of our product in place for the spring rush. Those boats’ just-in-time delivery gets interrupted; it may not be here in time, and that can have a tremendous impact here in the province of Ontario.”
If fertilizer shortages occur, some analysts have suggested that conventional production could shift to organic production. But supply chain economists say the world still requires synthetic nutrients to feed the masses.
“We’d like to farm without so much synthetic fertilizer, but the fact is that synthetic fertilizer supports the food that keeps almost eight billion people alive. We saw an example of this in 2021-2022, when the president of Sri Lanka decided that his country was going to switch to organic farming, [and he] banned synthetic fertilizer, and the results were disastrous,” says Noah Gordon. “Rice yields fell by about 40 percent, leading to a hunger crisis. The government fell, and the president had to flee the country. So, it is essential.”
Western Canada appears to be in much better shape than Eastern regions, largely because of domestic fertilizer facilities already in place there.
Trade Policy Shifts Could Signal Long-Term Relief
Ag lawmakers are looking at ways to help their growers. Senate Ag Committee ranking member, Senator Chuck Grassley (R-IA), is joining others in the ag industry in calling for the removal of Moroccan phosphate duties.
“Get the 18% tariff on Moroccan phosphate coming into the country,” Grassley said. “A U.S. company that has 80% of the market doesn’t need protection from imports. We have a couple of companies that dominate anhydrous ammonia. We ought to make it easier to get anhydrous ammonia from Trinidad for the most part, maybe other countries as well.”
Some ag groups have said all these recent price explosions will likely mean the need for more assistance payments. They are calling for the upcoming defense reauthorization to include some kind of help.
Sen. Grassley says farmers in his state want markets, not government checks — and that a solution is right in front of us in the nationwide sale of E15 biofuel.
“Put E15 in that instead of more money for farmers because farmers want their money from the marketplace and not from the U.S. Treasury,” Sen. Grassley said. “And the economists for the Iowa Corn Growers say that’s going to bring $14 billion more into the farmers’ pockets from the increased price of corn if we make E15 year-round.”
The House has a council tasked with finding a path forward for year-round E15 sales, but it has not met the deadlines to present its findings.
As we continue to closely monitor the developments in the Strait of Hormuz, ongoing disruptions are raising concerns about fertilizer shipments and broader supply chain impacts for U.S. agriculture.
National Sorghum Producers Chairwoman Amy France joined us on Thursday’s Market Day Report, offering perspective from sorghum growers on the volatile situation and echoing calls from other industry groups for the removal of Moroccan phosphate duties to lower fertilizer prices.
In her interview with RFD NEWS, France discusses the extent to which U.S. farmers depend on global fertilizer markets and how current disruptions are affecting producers. She also explains the impact of countervailing duties on Moroccan phosphate imports and ongoing efforts by ag groups to have those duties revoked.
France also outlines what actions could help lower input costs and improve fertilizer availability in the near term, and shares an outlook for the growing season as spring planting ramps up across the country.
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Coming up on Tuesday’s Market Day Report, the National Corn Growers Association will join us here in the studio, talking E15, and what year-round sales could mean for farmers working to keep the books in the black this season. They’ll join us Tuesday at 11:00 AM ET on RFD Network and streaming live on RFD+
