Crop Inputs

Crop input updates

Energy markets tighten amid Middle East disruptions. 

Energy markets remained volatile through August and early September as continued disruptions in the Strait of Hormuz heightened concerns over global oil supplies. Brent crude exceeds $100 per barrel, reaching its highest level since July. Some analysts warn prices could exceed $120 per barrel if regional tensions further disrupt energy flows. Diesel markets remain particularly tight due to low global and domestic inventories and reduced supply from the Middle East and Russia. 

Transportation costs remain elevated. 

Transportation markets face several cost pressures. Rising diesel prices are impacting all modalities, particularly trucking and rail. Heightened geopolitical tensions continue to impact shipping rates, with a recent surge in bulk rates further driven by vessel shortages, challenging weather in the Pacific and higher commodities demand. U.S. inland waterway transportation faces localized disruptions from low-water conditions, lock maintenance, and draft restrictions on sections of the Mississippi River system. The Trump Administration extended the Jones Act waiver for another 90 days on August 17, though narrowed its scope. The Jones Act legally requires all maritime cargo moving between U.S. ports to be carried exclusively on vessels that are built, owned, flagged, and crewed by Americans. The waiver is intended to reduce costs and improve shipping capacity.   

Nitrogen fertilizer prices ease slightly. 

Fertilizer markets provided some relief in late August, with nitrogen-based products down between 5% and 8% month over month. However, most major fertilizer products remain more expensive than a year ago, and fertilizer costs continue to be influenced by energy markets and geopolitical developments. Despite recent declines, USDA and Farm Bureau analysis indicates fertilizer expenses are projected to increase more than 15% in 2026, highlighting the continued pressure crop input costs are placing on farm margins. 

Labor outlook remains uncertain. 

In August, a federal court ruled that the Department of Labor's current H-2A wage methodology was unlawful, but existing Adverse Effect Wage Rates remain in effect while a replacement system is developed. While the existing rules remain in place, this ruling creates immense uncertainty among growers who rely on H-2A labor.