Farmers Face Surging Energy Costs and Trade Pressures

Midwest farmers are entering the 2026 planting season under acute financial strain as diesel and fertilizer prices climb sharply. The increases threaten to accelerate farm exits, lift consumer food costs, and further weaken rural economies already pressured by lower crop prices and weather extremes.

Diesel averaged $5.67 per gallon as of May 14, a 60 percent rise from a year earlier, according to AAA data. Fertilizer shortages have left 70 percent of farmers unable to purchase needed supplies, the American Farm Bureau Federation reports. Mark Mueller, president of the Iowa Corn Growers Association, described conditions as more difficult than any period since the 1980s farm crisis. Bankruptcies are rising and lenders are tightening credit, he said.

Multiple factors converge on producers. Energy prices rose after the Strait of Hormuz closed during the Iran conflict. Fertilizer shipments were blocked through the same route. Export markets contracted after new tariffs and Chinese import limits took effect. Global drought has reduced the U.S. cattle herd to its lowest level in decades, pushing ground beef prices to $6.90 per pound in April, up 19 percent year over year, Bureau of Labor Statistics figures show.

Cornell agricultural economist Wendong Zhang noted that farmers lack quick tools to adjust. In Iowa, soybean prices fell from $13–$15 to roughly $10 per bushel as China purchases declined. Arkansas and Ohio growers reported similar cost spikes, with one first-generation farmer seeing fuel bills rise from $400 to $700 per month.

The administration has responded with targeted aid. An $11 billion bridge payment has disbursed $9.7 billion to 510,520 row-crop farmers, with 42 percent going to corn producers and 24 percent to soybean producers, USDA data indicate. Agriculture Secretary Brooke Rollins announced $900 million in grants for independent fertilizer companies and steps to streamline permits. Trump stated after a summit with China’s Xi Jinping that Beijing agreed to purchase billions of dollars in soybeans, though no specific contracts have been announced.

Calls to Minnesota’s farm mental-health helpline reached a five-year high in fiscal 2025 and have already exceeded that pace in the current year. Lower-income households face compounded effects because they spend a larger share of income on food while recent SNAP reductions take effect, Zhang said.