WASHINGTON, D.C. (RFD NEWS) — Agriculture leaders across Washington are highlighting the latest push by the U.S. Department of Agriculture (USDA) to strengthen domestic fertilizer production as producers continue facing mounting input cost pressures tied to global instability and rising fuel prices.
At the center of the announcement is the Blue Point Project in Louisiana, a $3.7 billion ammonia facility, USDA says, that will become the world’s largest ammonia plant once completed.
USDA Pushes Domestic Fertilizer Expansion
Agriculture Secretary Brooke Rollins announced that permitting for the Louisiana project is expected to wrap up within 45 days.
Rollins also said USDA will restart the Fertilizer Production Expansion Program and streamline projects that had previously stalled due to climate-related reviews under the prior administration.
In addition, USDA is hiring a new economist dedicated specifically to tracking farm input costs, such as fertilizer, diesel, and transportation expenses, as they continue climbing nationwide.
House Agriculture Committee Chairman Glenn ‘GT’ Thompson said the U.S. must reduce its dependence on foreign fertilizer supplies.
“One of the most critical inputs that farmers need for increasing their yield to do all the great things they do working seven days a week is fertilizer,” Thompson said. “It’s that input. And for too long, we have been overly dependent on foreign markets for the various inputs of fertilizer.”
Input Costs Continue Rising Across Farm Country
Agricultural economists say fertilizer and fuel markets have remained under pressure since conflict involving Iran disrupted global energy markets and shipping routes tied to the Strait of Hormuz.
Dr. Michael Deliberto with Louisiana State University says producers across the country are feeling the impact.
“This isn’t a Louisiana thing or a Mid-South thing. This issue is very real, and it’s resonating across farm country right now.”Deliberto noted that many farmers entered 2026 already expecting a difficult economic environment due to tighter lending conditions and elevated production costs, despite stronger safety net provisions passed last year.
He also warned that fertilizer and diesel spikes are significantly increasing per-acre production expenses.
“When you look at the fertilizer recommendations that our agronomists put forward at LSU every year, depending upon the soil texture, we’re anywhere between 200-250 pounds of N, and when you translate that to where we were in early January versus where we are here at the end of April, anywhere from a $66 to $83 increase just in the cost of nitrogen.”
Deliberto added that rising diesel costs, tied to shipping disruptions in the Middle East, are compounding the problem for producers and grain transportation networks alike.
Rail Fuel Surcharges Add More Pressure
Fuel costs are now spilling into transportation markets as rail companies implement steep fuel surcharges on grain shipments.
According to the USDA’s Grain Transportation Report, BNSF Railway will raise its June fuel surcharge to 46 cents per mile, up from 8 cents during the same period last year.
Meanwhile, Union Pacific Railroad is increasing its surcharge to 69 cents per mile, compared to 30 cents last June.
For wheat shipments moving from Wichita to Houston, those increases translate to approximately $250 more per railcar on Union Pacific and nearly $390 more per load on BNSF.
Higher transportation costs follow the USDA’s forecast of the smallest U.S. winter wheat crop since 1958.
Farmers Voice Concerns Over Input Costs
Sen. Chuck Grassley (R-IA) says rising diesel and fertilizer prices continue dominating conversations with farmers in Iowa.
“We’re hearing about it all the time from farmers,” he said. “Input costs, particularly as they’ve shot up with diesel and urea as a result of the Strait of Hormuz being down.”
Grassley says Congress can take steps to support agriculture in the near term, but argued the biggest relief for producers would come from an end to the conflict impacting global energy markets.
Minneapolis Fed: Farm Incomes Drop in First Quarter
A new survey of agricultural lenders is highlighting growing financial stress across farm country, as producers continue dealing with weaker incomes, elevated borrowing costs, and increasing reliance on operating loans. The latest first-quarter survey shows farm income remained under pressure, reversing gains seen late last year.
“A continued downward pressure on incomes — a little bit better on the income side than we’ve seen in some recent quarters, but actually still firmly in negative territory, and after a kind of a bump at the end of 2025 in the fourth quarter, we kind of saw them turn back downward again,” explained Joe Mahon, Director of Regional Outreach for the Federal Reserve Bank of Minneapolis.
The report also points to mounting strain in the agricultural lending environment as farmers contend with persistently high interest rates and tighter cash flow conditions.
Nearly half of agricultural lenders surveyed said loan demand increased significantly during the quarter, signaling many producers are relying more heavily on borrowed capital to manage rising expenses and operating costs.
At the same time, repayment rates declined, raising additional concerns about financial stress in parts of the farm economy.
Mahon noted the repayment figures do not account for early loan payments, but the broader trend still reflects ongoing financial pressure facing producers nationwide.
Corey Rosenbusch with The Fertilizer Institute joined us to discuss supply chain disruptions and what farmers should watch as global tensions impact fertilizer markets.
