Why the Iran Conflict Could Shrink U.S. Corn Plantings This Spring

At first glance, tensions in the Middle East might seem far removed from the planting decisions farmers across the Midwest are making right now. But in today’s interconnected global markets, disruptions in oil flows, fertilizer supplies, and geopolitical alliances can quickly translate into changes in crop economics at home.

As the situation unfolded over the past week, analysts say the reaction across commodity markets illustrated just how closely agriculture is tied to global energy and political dynamics. While commodity markets ended the week on a high note, farmers are now feeling the impact in Iran with not only higher fertilizer prices, but the concern that farmers may not even be able to find enough fertilizer for spring.

Fertilizer Availability and Affordability

Those economic pressures are already building across farm country.

If the conflict drags on, Dan Basse, founder and president of AgResource company believes fertilizer availability and affordability could become a major global issue and impact crops already in the ground.

“I was just back from Brazil, and the Brazilians are very concerned about getting enough fertilizer at the right price for their upcoming spring seeding campaign, which starts in early September,” Basse says.

Brazil’s agricultural system depends heavily on imported fertilizer, making it particularly sensitive to global supply disruptions.

“So that would be the first country that it affects,” Basse says. “A little bit of effect for India and around the Southeast Asian countries. But Brazil needs to buy a lot of fertilizer.”

In the United States, the fertilizer story is already beginning to influence conversations about spring planting decisions.

Many farmers had delayed fertilizer purchases through the winter, hoping prices would decline before planting season arrived. In some cases, they were waiting on financing or government payments before committing to those input costs.

“Unfortunately, the timing of it with this war couldn’t come at a worse time,” says Chip Nellinger, founder and partner of Blue Reef Agri-Marketing. “I think Dan makes a good point that the Brazilian farmer fertilizes a lot of those bean acres down there. They really rely on that and they need to make purchases.”

But the U.S. situation is slightly different and potentially more vulnerable to sudden price spikes.

“Unfortunately, the U.S. producer, I think in some cases waited until late winter, early spring hoping that nitrogen fertilizer prices would come lower,” Nellinger says. “They initially started to come lower and they were seeing the benefit of that.”

Then the geopolitical situation changed with fertilizer prices shooting higher.

“It’s a wheat story as well,” Nellinger notes. “There’s a lot of nitrogen that needs applied on U.S. wheat acres here over the coming three or four months ahead of us.”

But the most significant planting implications may fall on corn.

Corn is far more fertilizer-intensive than soybeans, particularly when it comes to nitrogen. When fertilizer prices rise sharply, the relative profitability of soybeans often improves quickly. That dynamic was already influencing acreage expectations even before the conflict escalated.

“Price alone with what new-crop beans had been doing was shifting some acres as it was,” Nellinger says.

Corn Acres at Risk As Conflict Continues

Now the fertilizer shock could accelerate that shift, according to Nellinger.

“Now with the fertilizer situation and the effects of the war, I think you could see additional acres move out of corn to beans,” he says. “Particularly on the fringe areas.”

He doesn’t expect the shift to dramatically alter planting plans in the highest-producing Corn Belt counties.
“Maybe not so much in the 50 or 60 million acres right in the heart of the I-states with the highest-yielding ground,” he says.

But outside those core areas, the economics could push growers toward soybeans.

“Certainly away from that area, it could be a definite impact on acreage,” says Nellinger.

The satiation has caused Basse to already adjust his acreage projections accordingly.

“I’ve taken my corn planting estimate down about a million to a million and a half acres relative to the war and fertilizer,” he says.

Before the conflict escalated, his projection called for roughly 94.5 million acres of corn.

“So I was at 94.5,” Basse says. “Now down around 93 to 93.5.”

At the same time, he’s increasing expectations for soybean plantings.

“I’ve taken my bean acreage estimate up to 86.5 or 87,” he says. “So we have made adjustments.”

Still, Basse emphasizes that fertilizer prices are only one factor in the complex decision-making process farmers face each spring.

“I do think fertilization prices are very important for the farmer heading into the spring,” he says. “Weather will still be more important, but that’s a place to start anyway.”

And the full extent of any acreage shift may take months to fully understand.

“I’m fearful we may not find out about this until June,” Basse says. “I’m not sure the March NAS report is going to catch it right off the bat.”

Planting decisions often evolve as conditions change during the spring season.

“We may have to wait a few weeks to get into it before we really understand the breadth of the switching that could be going on,” he says.

Ultimately, the long-term impact on agriculture will depend largely on how long the geopolitical tensions persist.

“Obviously we’re seeing the energy situation,” Nellinger says. “Longer term, I’m not so sure.”

Much of the global focus right now remains on reopening critical energy shipping lanes and restoring stability to oil markets.

“I think the first item of business in the United States’ mind is going to be getting that Strait of Hormuz open and flowing again. That’s got to be high on the list,” says Nellinger.

If that happens quickly, the agricultural ripple effects may prove temporary.

“So I think it can be a temporary situation here,” Nellinger said, “assuming that it’s over in a matter of weeks and not years.

Fertilizer Prices Spike and Supply Concerns Grow

Nitrogen fertilizer production is heavily tied to energy costs. When energy prices rise, fertilizer costs often rise with them. That connection is especially important this time of year, when farmers are finalizing spring input purchases and locking in crop plans.

And in the past week, fertilizer markets have reacted sharply.

According to Josh Linville, vice president of fertilizer at StoneX Group, prices in some markets have surged dramatically in a matter of hours. Urea is one key example.

“I’ve actually heard prices there are up over $100 a ton in one 24-hour period,” Linville says. “And we’re not even sure that’s even available still.”

That type of price spike is unusual even for fertilizer markets, which are known for volatility. But Linville says the concern now goes beyond just higher prices. There are growing fears about actual supply shortages if the conflict disrupts global fertilizer trade flows for too long.

To understand why, he points to the concentration of fertilizer production around the world.

“But urea, it’s the more visible market that we have out there,” Linville says.

Linville says when you look at the top ten global exporters of urea around the world, many of those exporters are located in regions now directly or indirectly affected by geopolitical instability.

“Russia—do you feel real confident that Russia’s always going to be there for us? I certainly don’t,” Linville says.
“Qatar, Iran, Egypt—we start to talk about Egypt yesterday. Everybody’s focused on the Middle East.”

Even countries not directly involved in the conflict could see production disrupted because of energy shortages.

“Israel is taking their gas fields offline because of the fear of retaliatory attacks,” Linville explains “Those gas fields are what feed Egyptian manufacturers, and when their gas values get low, they shut it down.”

Other key fertilizer exporters also sit in the same region.

“Oman, Saudi Arabia’s in the region, Algeria’s in Egypt,” he says.

At the same time, global fertilizer supplies were already constrained before the conflict began.

“China should be a top four, top three exporter,” Linville notes. “But their government was already stopping exports in order to keep those tons at home.”

Europe has also struggled to maintain full production levels after losing access to cheap natural gas supplies.

“Europe largely isn’t on here, but because they shut off those cheap gas flows from Russia, their production rate’s about 75% normal,” Linville says. “That’s millions of tons of urea not being produced per year.”
Those constraints mean the global fertilizer market has very little cushion if supply disruptions worsen.

When High Prices Become Demand Destruction

If the conflict continues to disrupt shipping through the Strait of Hormuz, Linville says the industry could move from higher prices into outright shortages.

“If this thing is to stay as it is and the Strait of Hormuz remains shut out, we need to start talking about a limited amount of nitrogen units out there, we need to talk about a limited amount of phosphate units that are out there,” he says.

In a free market, prices rise when supply can’t keep up with demand. But Linville says fertilizer markets are now entering a phase where price increases are meant to do something very specific: force demand lower.

“When we don’t have enough supply for the demand that’s out there, you can’t fix it with supply, which is the case right now with fertilizer,” he says “The price ratchets up higher and higher and higher. And what it’s trying to do. It’s trying to kill demand.”

That demand destruction often shows up in agriculture through crop switching.

“That’s 100% what the phosphate market and the nitrogen market is trying to do today,” Linville says “It is trying to pressure that farmer to the point where they break and say, fine, I’ll put on beans. I’ll put on something else.”
As more farmers look at options, and could opt to not spend the money to plant corn, it could have a major impact on planting decisions this spring.

Corn Acres Looked Ready to Expand—Then Costs and Conflict Complicated the Outlook

The situation this week is a reminder how quickly things can change. Just days ago, the outlook for U.S. corn acreage looked fairly straightforward.

Heading into Commodity Classic, much of the conversation centered on the possibility that farmers could plant even more corn than the 94 million acres currently projected by USDA.

That expectation held even though production costs remain historically high. Corn is one of the most input-intensive crops farmers grow, and fertilizer prices have been elevated heading into the 2026 planting season.
But economists say acreage decisions aren’t always driven by input costs alone.

According to Krista Swanson, chief economist for the National Corn Growers Association, corn farmers are already dealing with a difficult financial environment, even before factoring in new market volatility.

“Negative margins again for 2026,” Swanson says. “This is the fourth consecutive year that we are looking at negative net returns for corn on average across the United States.”

Those losses are significant. On average, she estimates farmers could see losses of roughly $100 per acre growing corn this year.

“And we’re looking at losses of about a hundred dollars an acre,” Swanson explains. “And as we think about that, these negative returns have been growing over these four consecutive years as well.”

Farmers are accustomed to navigating occasional down cycles, but extended stretches of losses can create much deeper financial strain.

“We talk a lot about how farmers can often manage a couple bad years,” Swanson says. “But when we start to get to year number four, that makes it really challenging in terms of cash flow and liquidity.”

Even so, high production costs alone may not be enough to significantly reduce corn acreage.

Swanson says that’s largely because farmers faced a similar cost environment just one year ago—and still planted a large corn crop.

“That’s something I’ve been thinking about, will production costs make farmers turn away from corn because it’s one of the more costly crops to produce?” she says. “But I would have said the same thing a year ago.”

Looking back at last season, production costs are actually very similar to where they stand today. Yet, farmers planted nearly 100 million acres of corn in 2025.

That’s one reason USDA’s acreage projections remain relatively strong. The agency considers multiple economic signals when estimating planted acres, including crop price relationships.

“That’s probably why last year is part of the modeling that USDA does to project 94 million corn acres,” she explains.

In particular, analysts closely watch the corn-to-soybean price ratio, which plays a major role in determining which crop farmers choose to plant.

“They consider where the corn to soybean price ratio is, the other price ratios of other crops,” Swanson says.

Corn and soybeans compete for many of the same acres across the Midwest, meaning small changes in price relationships can shift planting decisions. Still, last year offers an important reminder.

“Despite that high production cost, we still planted so many corn acres,” Swanson says . “So I don’t know that that will be a restraint.”

Swanson said last week during Commodity Classic that the buzz among corn farmers was not to make a big switch away from corn, which means she said it was likely U.S. corn farmers could plant north of 94 million acres in 2026. Now with the fertilizer situation, analysts argue U.S. corn acreage is only trending lower.

Whether that remains true in 2026 could depend on how input costs, and global events, continue to evolve in the weeks ahead.