Soaring Fertilizer and Fuel Costs Squeeze Iowa Farmers Amid Iran War

Ripple effects from the ongoing conflict are threatening the financial viability of family farms across the U.S.

Mar. 29, 2026 at 7:29am

Got story updates? Submit your updates here. ›

A geometric abstract illustration using bold shapes and primary colors to conceptually represent the economic pressures facing the agricultural industry due to rising fertilizer and fuel prices.Soaring input costs threaten the financial viability of family farms across the U.S. heartland.Vinton Today

As the war in Iran disrupts global supply chains for oil and fertilizer, Iowa farmer Lance Lillibridge and others across the country are facing skyrocketing costs for essential agricultural inputs like diesel and nitrogen-based fertilizers. These price increases, coming at the worst possible time before spring planting, are adding to the financial strain on farms already grappling with rising bankruptcy rates and concerns about the future of family farming.

Why it matters

The crisis in the agricultural sector has far-reaching implications, as higher costs for farmers are passed on to consumers in the form of increased grocery prices. This situation highlights the vulnerability of the U.S. food system to geopolitical shocks and the need to build greater resilience through measures like improved efficiency, alternative sourcing, and policy support for struggling producers.

The details

Fertilizer prices have jumped by around 20% for ammonia and 50% for urea since the start of the Iran war, according to Oxford Economics. Meanwhile, diesel fuel costs have surged 43.5% nationally, further escalating operational expenses for farmers. Lillibridge reports his overall costs have risen 25% compared to last year, adding to the financial pressure. The combined effect of these input cost increases is threatening the viability of farms of all sizes, with U.S. farm bankruptcies already up 46% in 2024 before the current crisis.

  • Fertilizer prices have increased by approximately 20% for ammonia and 50% for urea since the start of the Iran war.
  • Diesel fuel prices have jumped 43.5% nationally since the start of the Iran war, according to AAA.
  • U.S. farm bankruptcies increased by 46% in 2024 compared to the previous year, before the current crisis.

The players

Lance Lillibridge

A farmer in Vinton, Iowa whose concerns echo those of many across the U.S. agricultural sector.

Scott Marlow

A former USDA official and agricultural policy expert who explains the ripple effects of input cost increases from the farm to the grocery store.

American Farm Bureau Federation

An organization that reported a 46% increase in U.S. farm bankruptcies in 2024, highlighting existing vulnerabilities in the agricultural sector.

Got photos? Submit your photos here. ›

What they’re saying

“It couldn't have come at a worst time.”

— Lance Lillibridge, Iowa farmer

“Every step of the process, all the way from seed, all the way through to finished product”

— Scott Marlow, Former USDA official and agricultural policy expert

What’s next

Farmers are exploring options to improve efficiency and reduce input costs, such as precision agriculture techniques and alternative fertilizer sources. Policymakers may also consider aid programs to support struggling producers.

The takeaway

The crisis in the agricultural sector triggered by the Iran war highlights the vulnerability of the U.S. food system to geopolitical shocks and the need to build greater resilience through measures like improved efficiency, alternative sourcing, and policy support for struggling producers. The ripple effects from higher costs for farmers will ultimately impact consumers at the grocery store.