NASHVILLE, Tenn. (RFD NEWS) — Tensions remain high in the Middle East, with the Strait of Hormuz still closed by Iranian forces. Around 20 percent of the world’s oil is sent through that corridor, which President Trump says he’s currently working to secure. The current situation is putting pressure on critical inputs, like fuel as well as fertilizer availability, heading into spring planting.
The American Farm Bureau Federation (AFBF) is calling for intervention to prevent food supply shocks caused by shipping disruptions in the Strait of Hormuz. In a letter published Monday (PDF Version), AFBF president Zippy Duvall lists seven recommendations to address the impact, ranging from using the U.S. Navy to provide safe transit for shipments to leveraging federal tools to remove financing barriers for vessels transporting fertilizer cargo.
The letter states, “Like oil, global fertilizer markets are highly vulnerable to disruptions in maritime transit routes, especially through the Strait of Hormuz, a critical shipping corridor for key fertilizer materials and finished fertilizer. Further, the recent energy production halts in the Middle East will affect the price and availability of many downstream products farmers depend upon. These supply chain shocks are expected to drive already record-high input prices even higher at a time when farm margins are already extremely tight and many farmers are underwater.”
Crude oil is now at its highest price per barrel since 2022, and diesel has gained nearly a dollar in the last week, right as planting season begins. AAA shows diesel is holding around $4.65 a gallon this morning. On Sunday, it was $4.59, and a week ago it was $3.70.
Crude benchmarks have risen sharply in recent sessions, with Brent crude — the global benchmark — leading gains and West Texas Intermediate following closely. The move reflects both physical supply risk and market reaction as traders weigh potential disruptions to exports through key routes and reduced output across major producing regions. Historically, similar geopolitical shocks — including 2008, 2011, and 2022 — produced short-term spikes before stabilizing once supply clarity returned.
Refined fuels are responding as well. Diesel and gasoline futures have strengthened alongside crude, raising concerns about near-term transportation and operating costs. Natural gas markets remain more stable domestically but face tightening global fundamentals that could spill into fertilizer pricing later this year.
For farmers, the immediate impact is felt in diesel, drying fuel, irrigation energy, and freight costs, while longer-term risks center on fertilizer and crop input pricing. Analysts note the speed of the rally matters more than the level, since rapid increases typically move quickly into operating expenses before commodity prices adjust.
IMPACT ON DIESEL PRICES
Diesel prices are rising as the spring planting season approaches, with much of the pressure tied to unrest in the Middle East and its impact on global energy markets. Patrick DeHaan with GasBuddy joined us on Monday’s Market Day Report to discuss the latest developments in the petroleum sector and what they could mean for farmers who rely heavily on diesel throughout the year.
In his interview with RFD NEWS, DeHaan explained that recent volatility in fuel markets has pushed diesel prices higher, creating additional cost concerns for producers heading into planting season. He discussed what farmers may expect for fuel costs in the coming days and weeks as market conditions continue to shift.
DeHaan noted that while geopolitical tensions can drive rapid increases in fuel prices, those prices can sometimes retreat just as quickly if market pressures ease. Finally, he outlined other factors influencing fuel markets beyond the conflict, offering a perspective on the broader forces shaping diesel prices.
IMPACT ON AG SUPPLY CHAIN
As diesel prices continue to climb, attention is turning to the impact on the trucking industry, where fuel is one of the largest operating expenses. Lewie Pugh, with the Owner-Operator Independent Drivers Association (OOIDA), also joined us on Market Day Report to discuss how rising diesel costs are affecting small-business truckers.
In his interview with RFD NEWS, Pugh explained that fuel represents the largest variable expense for many independent drivers, meaning sudden spikes in diesel prices can quickly strain operating budgets.
Pugh also addressed market disparities, noting that large fleets often use bulk purchasing and fuel-hedging strategies to stabilize costs—options typically not available to smaller trucking operations. The discussion also focused on how independent truckers are coping with rising fuel prices and whether some of those higher costs are being passed along the supply chain to consumers.
IMPACT ON OTHER FARM INPUTS
It is not just fuel and energy costs that have seen big increases lately. Other inputs are also climbing in price. CoBank Economist Jacqui Fatka warns some could go higher depending on what you grow.
“USDA is estimating for corn and soybeans about 3%, a little over 3% increase in input cost, and everybody knows, too, we’re not seeing any relief really on much of any of the individual categories for the inputs,” Fatka says. “A little bit of relief, we thought, on the fuel side, but obviously that is already starting to change today as well. So, we could actually see input costs go up even higher.”
Traders are also watching input costs. Sam Hudson with Corn Belt Marketing tells us one input stands out among the rest: fertilizer.
“As it relates to corn and soybeans, the immediate concern is fertilizer prices, which have spiked to $600-$650 bucks a ton. Right here at the bell, before we go to the field, you may have some issues with people paying those prices if they haven’t locked it in,” Hudson says. “Could also have some physical availability problems. We don’t need that big of a percentage drop in corn acres to spark an issue. And this is something we’ve been speaking to for the past several months. Corn demand is already very large, record large. The demand, USDA has been behind the 8 ball in terms of catching that demand up. All the while, they advertise those big acres and trend yields. So if you threaten any of that, it sort of flips the equation.”
Federal officials could soon put their foot down on fertilizer costs. The Department of Justice (DOJ) recently launched an antitrust investigation into pricing practices. Bloomberg reports that the DOJ is looking at producers such as Nutrien, Koch Industries, Mosaic, and a few others.
IMPACTS ON GRAIN MARKETS
As geopolitical landscapes shift, we are also seeing geopolitical tensions impacting the grain sector. Oklahoma State Extension economist Dr. Todd Hubbs says the grain markets are going through a period of recalibration, but notes that this is different from the action we saw when Russia invaded Ukraine.
“Right now, the Strait of Hormuz is the issue — BUT this isn’t like a Black Sea shock, it’s very different,” said Hubbs. “Those nations around the Arabian Gulf, they do import a lot of grain and particularly wheat. One of the big importers in Iran, and they get it mostly from Russia. If it spreads over into the Red Sea area and, you know, the maritime shipping lanes over there got impacted, then we’re looking at something completely different that could back it up. Thus far, I’m not sure it’s going to spread that far. Anything that impacts Egypt and the North African countries is a real issue for wheat markets because they’re major importers. So as of right now, a lot of it looks like it’s contained in the Gulf area there and the issues around the Strait of Hormuz.”
Dr. Hubbs says rising fertilizer and energy costs aren’t putting those producers in a tough spot. He says soybeans could continue to be heavily influenced by biofuel policy and the demand for soybean oil.
NEED FOR YEAR-ROUND E15
With tensions in the Middle East pushing oil and gas prices higher, Troy Bredenkamp, Senior VP of Government Affairs for the Renewable Fuels Association, says it is yet another reason Congress should quickly approve year-round sales of E15.
“It just speaks to the need for us to take every action we can to insulate ourselves from these kinds of geopolitical-induced price spikes,” Bredenkamp says. “If it were to be adopted nationally, it would remove or displace almost half of the volume that is coming from OPEC countries.”
But Bredenkamp says ethanol’s war with mid-size refiners is not over despite the president’s backing of year-round sales, something that would be vital for consumers as geopolitical conflict continues.
“Mid-size refiners, in particular, will have a very comfortable margin, regardless of what’s happening in the Middle East,” he explains. “Every additional percentage of ethanol that could be blended into gasoline is going to lower the price at the pump. That is our story…that is the one we will be trying to get through to Congress, and the need to get year-round E15 done.” During the House Ag Committee farm bill markup, an amendment was entered to force a vote on year-round sales, but it ultimately failed. Committee Chair Rep. Glenn “GT” Thompson said it falls under the energy committee, not the ag committee.
As U.S. officials drag their heels on E15, Brazil’s biodiesel industry is urging the government to increase the country’s diesel blending mandate.
Fuel groups say raising the blend by one percentage point this month could help shield Brazil from rising diesel import prices linked to tension in the Middle East. Brazil’s ag lawmakers support the move. A 2024 law calls for gradually increasing biodiesel use through 2030. The final decision now rests with the country’s national energy policy council.
