American farmers are facing a cascade of shocks that is beginning to go beyond the agricultural sector alone. Higher diesel and fertilizer prices, drought in the Corn Belt, disruptions tied to the Strait of Hormuz, and fading demand from China: several factors are converging and could weigh on food prices, inflation, and, in the long run, the political climate in the United States.
According to estimates from the American Farm Bureau Federation, the leading advocacy group for American agriculture, producers of nine major crops could incur up to $31 billion in losses this year in the absence of public aid. Some sector officials even say that total losses could exceed $60 billion.
Diesel has jumped 43% since the start of the war
The first shock comes from energy.
According to data from the U.S. Energy Information Administration cited in the dossier, the average price of diesel, essential for running farm machinery and for transportation, has reached $5.44 per gallon, compared with about $3.80 before the war, a rise of nearly 43%.
This increase directly raises operating costs for farms: tractors, combines, irrigation, grain drying, and transport are particularly exposed to fuel price fluctuations.
The crisis around the Strait of Hormuz and the American–Israeli–Iranian conflict further squeezes an agricultural sector already grappling with thin margins.
Fertilizers also cost much more
Fertilizers represent the other major source of tension.
The price of a ton of phosphatic fertilizer has risen from around $470 a decade ago to more than $900 today.
In Iowa, one of the leading U.S. farming states, fertilizer prices are said to have risen by about 30% in a year, according to Guang Tian, an economics professor at Iowa State University.
For farmers, the equation becomes particularly difficult: the costs required to produce each hectare rise while revenues from certain crops have been under pressure for several years.
Drought hits the “Corn Belt”
On top of these costs, climate risk now looms.
Episodes of drought and high temperatures are affecting several areas of the Corn Belt, the great Midwest grain belt that concentrates a large share of U.S. corn production.
A deterioration in yields could reduce the available supply at a time when production costs are already high.
Markets are already starting to price in this worry.
Corn futures for December delivery rose by around 10% during August, crossing $5 per bushel, or about 25 kilograms, their highest level in three years.
Prices for From field to supermarket, a risk for food prices
The issue does not stop at farmers’ income.
Corn, soy, and wheat are present at several levels of the food chain: animal feed, vegetable oils, flour, processed products, and the broader food industry.
A sustained rise in the cost of these raw materials can therefore gradually feed into the prices of other food products.
This risk comes as U.S. inflation is reported at 3.14%, still above the Federal Reserve’s 2% target.
Thus, the trajectory of the agricultural sector could become an additional inflationary pressure if production costs and cereal prices continue to rise.
Farmers are also facing a trade problem.
Tariff tensions have caused an estimated loss of around $15 billion in American agricultural exports to China, with a particularly large impact on soybeans.
China has historically been a major outlet for American soybean growers.
The decline in exports comes at a time when farmers must already absorb higher expenses for fuel, fertilizers, and other inputs.
The Trump administration has attempted to cushion the blow with several support measures.
A package of $11 billion was specifically set aside to help farmers facing higher diesel, fertilizer costs, and inflation.
In addition, around $14 billion was allocated through traditional agricultural support programs.
That adds up to roughly $25 billion in total aid mentioned.
For agricultural organizations and some farmers, these amounts remain insufficient in the face of mounting losses and rising costs.
The agricultural crisis also carries a significant political dimension for Washington.
Rural areas and many Corn Belt states form an important electoral base for the Republican Party.
According to the analysis reported by Al Jazeera, some farmers could attribute part of the deterioration in their situation to the Trump administration, notably because of the war against Iran, disruptions around the Strait of Hormuz, and trade tensions with China.
The situation thus places Washington before a delicate equation: to further support producers, to contain the potential impact of higher cereal prices on food prices, and to prevent an agricultural economic crisis from turning into political discontent in rural states.
For American farmers, several risks now stack up: more expensive fuels and fertilizers, drought, volatile farm prices, reduced Chinese markets, and geopolitical uncertainties around Hormuz.
A combination that could make the American agricultural crisis a much broader issue than simply crop yields.
China, another challenge for American producers
$25 billion in aid, but still substantial losses
A dossier that is also becoming political
