U.S. farmers, who have spent the last year grappling with tariff shocks and shrinking margins, now face another blow to their operations.
“You’ve got the usual tension, you’ve got the added tension of fertilizer and trade, and you’ve got the perhaps more crucial context of, margins are very poor,” Seth Meyer, a former chief economist for the U.S. Department of Agriculture, told Fortune. “A bad decision this year could be pretty costly.”
While many farmers have already purchased fertilizer, others are now faced with the challenging decision of whether to purchase more at a higher price, or take the risk of producing more of a crop that is already at a surplus with rock-bottom prices.
“The chunk of the fertilizer has already been pre-purchased, but not all of it,” Meyer said. “This just adds to the tension on producers’ decision-making when they go into the field this year, if they don’t have all of their fertilizer needs booked.”
These recent pressures likely caused farmers to delay fertilizer orders, as they waited to see if prices eased or new aid programs were announced, Scott Stiles, extension agricultural economics program associate for the University of Arkansas System Division of Agriculture, told Fortune.
“A significant number of producers were delaying input purchases, either waiting to see if they got financing for 2026 or waiting for renewal of a working capital line for cash flow,” Stiles said. “That was a factor that delayed decisions about locking-in 2026 inputs.”
Even if the war in Iran is short-lived, the consequences of the conflict will linger, according to Ryan Loy, assistant professor and extension economist for the University of Arkansas Division of Agriculture. He pointed to a “rocket and feather” pattern that input costs follow after a disruptive event.
“When prices react, they go up like a rocket, but they are very slow to correct and come down like a feather,” Loy told Fortune. “This is all contributing to a kind of vicious circle that farmers are caught in.”
