Middle East Conflict Could Ripple Across U.S. Agriculture, Economist Says
The economic fallout from escalating tensions in the Middle East is already being felt in fuel and fertilizer markets, but agricultural economists say the broader impacts on U.S. farmers could be far more complex and wide-ranging in the months ahead.
New analysis from the Nebraska Farm Bureau suggests the recent attack on Iran and ensuing instability could create ripple effects across commodity markets, input costs and consumer demand, all of which directly influence farm profitability.
“This is a rapidly evolving situation, and while energy and fertilizer impacts are the most immediate, the secondary effects across agriculture could be just as significant,” said Nebraska Farm Bureau Economist Abygail Petersen. “What we’re seeing right now is a lot of uncertainty, and markets are reacting accordingly.”
Since the onset of the conflict, futures prices for corn and soybeans have trended higher, driven in part by rising energy costs and market volatility. But Petersen cautioned that multiple competing forces could shape prices moving forward.
One key concern is fertilizer availability. Higher prices and the risk of supply disruptions have led to speculation that some farmers may shift acreage away from corn, a fertilizer-intensive crop, toward soybeans or other alternatives. However, early indications suggest many producers may already be locked into their plans.
“Most farmers appear to have secured a significant portion of their fertilizer needs,” Petersen said. “That could limit how much acreage actually shifts, but if supply chain disruptions worsen or contracts aren’t fulfilled, planting decisions could still change.”
Even with potential adjustments, corn is expected to remain Nebraska’s dominant crop. Still, any reduction in corn acreage nationwide could support corn prices while placing downward pressure on soybeans.
Energy markets are another major wildcard. U.S. gasoline prices have surged sharply in recent weeks, posting one of the largest monthly increases in decades. If high fuel costs persist, economists warn it could reduce travel demand and, in turn, ethanol consumption.
“Lower gasoline demand typically means lower ethanol demand, and that has direct implications for corn,” Petersen said. “If ethanol production slows and exports don’t pick up the slack, that could weigh on corn prices.”
At the same time, higher diesel prices may boost demand for renewable diesel, potentially increasing demand for soybean oil and lending support to soybean markets.
Beyond crops, the livestock sector could also feel pressure. Rising fuel costs are expected to cut into consumers’ disposable income, leaving less money for higher-priced proteins like beef.
“Beef demand has been strong, but it’s also sensitive to broader economic conditions,” Petersen said. “If consumers start tightening their budgets because of higher energy costs, that could soften demand and impact cattle prices.”
Interest rates add another layer of uncertainty. Markets had previously anticipated multiple rate cuts in 2026, but inflation concerns tied to rising energy costs have shifted expectations.
“Higher inflation could keep interest rates elevated longer than expected, which increases borrowing costs for farmers,” Petersen said. “At the same time, if the broader economy slows, we could see pressure to lower rates. It really depends on how these competing forces play out.”
With so many variables in motion, from global conflict to domestic economic conditions, Petersen emphasized that the outlook remains highly uncertain.
“There’s no single direction these impacts are guaranteed to go,” she said. “Producers should stay informed, remain flexible and be prepared to adapt as conditions change.”
While the full effects of the Middle East conflict are still unfolding, one thing is clear: its influence will extend well beyond the region, shaping the economic landscape for American agriculture in the months ahead.