How Much the War with Iran Increases Costs for American Farmers

The decision by the Trump administration to attack Iran in retaliation for that country’s previous and potential future attacks on Americans continues to raise costs for producers, especially fertilizer. The economic hardship caused nearly two dozen U.S. agricultural organizations to already reach out to the U.S. Department of Commerce to ask for reductions in tariffs that have further increased fertilizer costs.

Here is how much more expensive it has become for America’s farmers by the numbers:  

20-25% -- Increase in anhydrous ammonia since late February

Fertilizer prices had already been climbing. But the increase has been more substantial since President Donald Trump launched military strikes on Iran.

Per farmdoc: “The ongoing conflict with Iran has resulted in significantly higher nitrogen fertilizer prices as damaged energy infrastructure and closure of the Strait of Hormuz has created supply chain bottlenecks.”

Recommendations from researchers at the University of Illinois and Ohio State University advise farmers to adjust nitrogen application rates because of the higher fertilizer prices compared to last fall.

40% -- Increase in urea in the United States’ Corn Belt region since late February.

Several thousand vessels have been slowed in the Strait of Hormuz, the vital shipping passage in the Persian Gulf, because of the ongoing war with Iran that has stretched into its second month. That slowdown chokes off supplies of fertilizer and increases prices for producers who didn’t already purchase fertilizer for this year.  

“Corn is the most nitrogen-dependent crop,” said Gretchen Kuck, an economist with National Corn Growers Association told MinnPost. 

“If you look at the cost of fertilizer versus the price of corn, we’re at historic margins,” Beck added. “That’s putting the squeeze on Minnesota farmers.”

20 – Number of American agricultural groups that signed a letter to the U.S. Secretary of Commerce asking for relief from escalating fertilizer prices. 

The rapid increase has alarmed farmers across the country amid additional concerns about how long the U.S. war with Iran will last and further disrupt supply chains. Concerns about rising fertilizer costs overall prompted a long list of agricultural groups to urge the Trump administration to drop tariffs on imports from Morocco and Russia to help producers.

These 20 groups and associations signed the letter:

• National Corn Growers Association

• American Soybean Association

• National Association of Wheat Growers

• National Cotton Council

• National Sorghum Producers

• Society of American Florists

• USA Rice

• US Rice Producers Association

• Arkansas Soybean Association

• Colorado Corn Growers Association

• Corn Growers Association of North Carolina

• Delta Council Georgia Corn Growers Association

• Georgia/Florida Soybean Association

• Illinois Corn Growers Association

• Illinois Soybean Growers

• Indiana Corn Growers Association

• Indiana Soybean Alliance, Membership & Policy Committee

• Iowa Corn Growers Association

• Iowa Soybean Association                   

The letter to U.S. Secretary of Commerce Howard Lutnick began, “On behalf of American farmers, growers and producers, we respectfully urge the Department of Commerce (“Commerce”) to revoke the countervailing duty orders (CVDs) on imports of phosphate fertilizer. Allowing the CVDs to continue will further worsen the dire economic conditions faced by American farmers.”   

The request also stressed how important phosphate fertilizer is to American producers, especially during this time of overall strain in the industry.

“Maintaining the phosphate fertilizer CVDs will allow a small set of powerful corporations to continue to limit supply options for farmers. This has already prevented farmers from accessing the tools that meet their crop production needs and resulted in lower yields and negative economic impacts,” the letter stated.

RELATED: Iowa State Auditor Rob Sand warned that farmers could pay higher prices if the U.S. Department of Justice allowed this purchase of a fertilizer producer in 2024.