Crop Margins: The Iran War Effect 2 Weeks In

Since the Iran war began on February 28, projected 2026 operating margins for both corn and soybeans have shifted. The escalation in the Middle East has reduced supplies of crude oil, natural gas/liquefied natural gas and key fertilizers, pushing some farm input costs sharply higher. Through the week ending March 13, ag or fertilizer-related inputs saw increases of up to 60%, with anhydrous ammonia up about 25%, urea up around 35%, and diesel up over $1/gallon. Grain prices also rallied, with corn and soybean futures up about 6% versus prewar levels before giving back half or more of those gains by March 16. The combination of higher input costs and current crop prices is what matters for farmers. Three margin scenarios resulting from the war highlight the range of impacts from the ongoing volatility: For those who purchased most of their fertilizer and fuel prior to March 1, this runup in grain prices has likely improved operating margins. For those who both buy inputs now and do something to lock-in prices or protect margins, current average margins for both corn and soybeans are still similar to where they were a month ago. In a worst-case scenario where higher-priced inputs are purchased now, and some price risk is not taken off the table, margins could be squeezed if grain prices later retreat. Key Takeaway Rerun 2026 budgets using current prices and consider protecting downside margin risk amid ongoing volatility.