VINTON, Iowa – Lance Lillibridge of Vinton, Iowa, says he is worried about spring planting as surging diesel and fertilizer costs tighten margins on his farm. He described rapidly rising input prices tied to the war in Iran and said the increases are piling onto an industry already under financial strain.
The price spikes reach beyond one operation. Ammonia and urea-core nitrogen fertilizer ingredients-are up around 20% and 50% since the start of the Iran war, according to Oxford Economics, while diesel gas is up 43.5%, according to AAA. Higher oil and gas prices have also hurt the major stock indexes, a sign that households could face broader cost pressures at the register.
Key price moves cited
- Ammonia: up around 20% since the start of the Iran war (Oxford Economics).
- Urea: up around 50% since the start of the Iran war (Oxford Economics).
- Diesel gas: up 43.5% (AAA).
- Lillibridge’s on-farm costs: up 25%, he said, once higher fuel, fertilizer, and financing expenses are factored in.
“Significant ramifications” for producers and consumers
“This situation is not driven by either the person producing the food or the person buying it,” said Scott Marlow, an agricultural policy expert and former deputy administrator of farm programs at the USDA Farm Service Agency. “And it will have significant ramifications for both those who produce our food, and for those who eat it.”
Marlow said the effect of higher energy and fertilizer costs is felt at every link in the supply chain: “It really impacts the cost of every step of the process, all the way from seed, all the way through to finished product, which affects the price when it gets to your grocery store,” Marlow said.
Those pressures land on top of an already complex policy environment. Federal safety-net programs such as crop insurance and commodity supports are authorized and periodically updated under the U.S. Farm Bill, overseen by the Senate Committee on Agriculture, Nutrition, and Forestry. While those tools can buffer extreme volatility, they do not fully offset rapid spikes in day-to-day operating costs like diesel or fertilizer for many producers.
Farm finances under added strain
Producers entered the year hoping to make up for prior losses. In 2025, U.S. farm bankruptcies rose 46% from 2024, according to the American Farm Bureau Federation, eroding equity that farmers often rely on to secure operating loans for seed, fertilizer, and fuel.
Higher input prices also complicate decisions being made right now in county Farm Service Agency offices and local banks, where loan officers, crop insurance agents, and producers are locking in plans for acreage, rotations, and risk coverage. For farms already carrying heavy debt or recovering from recent weather disasters, the latest shock leaves less margin for error if yields or prices disappoint at harvest.
Why fertilizer and fuel matter so much on the farm
Ammonia and urea supply nitrogen, the essential nutrient behind yield for major row crops such as corn, wheat, and other cereals. Ammonia is typically synthesized using natural gas as a feedstock, and urea is produced from ammonia, meaning fertilizer costs are tightly linked to global energy markets and disruptions in natural gas supply. As fertilizer prices rise, some farmers cut application rates or shift to crops that require less nitrogen, decisions that can reduce yield and local grain supplies in the short term.
Diesel powers tractors, combines, sprayers, and the trucks that move seed, fertilizer, and harvested grain-so increases in diesel prices can raise the cost of nearly every field pass and much of the post-harvest logistics. AAA tracks retail fuel prices nationally, while Oxford Economics provides global market analysis of commodities and macroeconomic shocks. Together, those indicators are closely watched by farm groups and policymakers as early signals of stress in the broader food system. Background on how fertilizers are used and why nitrogen is central to modern yields is outlined in reference works such as the Encyclopedia Britannica’s entry on fertilizer and related plant nutrients.
Voices from the field
“It just feels like the world is trying to take this all away from us right now,” Lillibridge said. He added that the financial pressure is weighing on decisions about passing the operation to the next generation: “If our kids see us struggling out here, why would they want to take it on?”
For local communities built around agriculture, those decisions have implications that go well beyond a single family farm, affecting rural schools, equipment dealers, grain elevators, and small-town tax bases.
As of the figures cited, diesel gas is up 43.5%, and ammonia and urea are up around 20% and 50% since the start of the Iran war, according to AAA and Oxford Economics. Those numbers, farmers and analysts say, will help determine not only what gets planted in the Midwest this spring, but also what American families ultimately pay at the grocery store later in the year.
