Crop Inputs

Crop input updates

Oil price volatility continues with Iranian conflict.

Front month future prices for West Texas Intermediate crude oil experienced immense volatility in April, ranging from $83.85 to $112.95 per barrel. U.S. diesel prices softened slightly in April but remain 50% above pre-conflict levels. The Strait of Hormuz remains closed, choking off about 13% of global oil and oil product supply (a significant portion of what was transported through the Strait has been rerouted via pipelines). Many analysts warn oil remains underpriced relative to current risk levels, inventory drawdowns and disrupted production (oil production facilities are not easily shut down and restarted). Regions heavily dependent on natural gas imports, including Europe and Asia, appear to be the hardest hit. Statements made by the Trump Administration as to the planned duration of military intervention change frequently and often conflict with those made by Iran’s leadership. On May 4, President Trump announced the U.S. Navy will guide commercial ships through the Strait of Hormuz. It remains unclear how successful this will be and whether it will lead to an escalation of the conflict. The Trump Administration has started withdrawing crude oil supply from the Strategic Petroleum Reserve, which now sits at about half of peak levels.

Transportation costs rise on higher energy costs.

The Baltic Dry Index, a measure of average bulk shipping rates, increased 37% on average in April due to strong grain demand, tighter vessel capacity and rising bunker fuel prices. According to DAT Freight and Analytics, spot trucking rates rose 12% for flatbeds, 6% for vans and 5% for reefers in April. Higher trucking rates are in large part due to rising diesel costs, and some companies are exploring alternatives such as rail. The 2026 CVSA International Roadcheck, an annual event assessing vehicle safety and driver compliance in the U.S., Canada and Mexico, will occur mid-May and is expected to result in lower trucking capacity. The trucking industry continues to experience a wave of bankruptcies in Q1 2026 due to tight margins and excess capacity. While not yet reflected in the data, rail costs are also likely to rise due to higher fuel costs.

Fertilizer costs continue to rise.

Phosphate prices increased at a moderate pace in April, while urea and anhydrous ammonia prices rose sharply. The conflict in Iran has reduced global supplies of nitrogen and phosphate fertilizers by stopping exports out of Persian Gulf countries. A survey by the American Farm Bureau suggests that fertilizer pre-booking rates were just 31% in the West heading into spring planting, meaning many producers are exposed to rising prices. The Trump Administration is responding in several ways, including issuing waivers to the Jones Act (a policy intended to support domestic shipbuilding capacity but limits available vessel capacity); removing restrictions on fertilizer imports from Venezuela; coordinating with the fertilizer industry to increase production rates; investigating the fertilizer industry for potential anti-trust violations; and pushing for streamlined permitting processes for new capacity.