Midwest Farmers Face Worst Agricultural Crisis Since 1980s as Energy and Fertilizer Prices Surge

Farmers across the Midwest are entering planting season under mounting financial pressure as the Iran conflict drives up diesel and fertilizer prices, deepening an agricultural downturn that some say is the worst since the crisis of the 1980s.

Why it matters: Rising fuel and fertilizer costs threaten to push more family farms out of business, drive up food prices, and further strain rural economies already battered by trade disruptions, inflation, and extreme weather.

The Big Picture: A Crisis Worse Than the 1980s

Mark Mueller, a northeast Iowa farmer and president of the Iowa Corn Growers Association, tells Axios that the current landscape is more challenging than at any time since the 1980s farm crisis. During that period, interest rates soared and exports plunged, triggering agricultural bank failures.

The stresses are already visible, with rising bankruptcies and lenders becoming more reluctant to provide farmers with operational loans.

"There's going to be fewer farmers next year than there is this year," Mueller says.

Key Factors Driving the Crisis

Farmers are grappling with a confluence of forces, including:

• Skyrocketing energy prices triggered by President Trump's Iran war, which led to the shuttering of the Strait of Hormuz, a vital passageway for fossil fuels.
• Spiking fertilizer prices and shortages after Iranians blocked shipments through the strait.
• Disrupted export markets tied to Trump's tariffs and Chinese import restrictions.
• Global drought and other weather pressures, including climate change.

Expert Insights: No Quick Fixes Available

"What makes this moment particularly hard is that farmers can't pivot quickly," says Wendong Zhang, an agricultural economist at Cornell University. "Farmers have some tools, but none are quick fixes."

Regional Impact: Farmers Struggle Nationwide

The crisis is hitting farmers hard across the country:

• Arkansas: Rising energy and fertilizer costs pressure farmers already facing lower crop prices.
• Ohio: First-generation farmer Michael Kilpatrick reports fuel bills rising from $400 to $700, with container costs up 30%. "If prices go up, we're eating that difference," he says.
• Iowa: Soybean prices have dropped from $13–$15 to around $10 per bushel due to falling exports to China.
• Minnesota: Calls to the state's farm and rural issues mental health line reached 314 in fiscal year 2025—the highest in five years—and topped 279 in the first nine months of the current fiscal year.

Economic Toll: Diesel and Fertilizer Prices at Record Highs

Across the country, the sudden spike in diesel and fertilizer prices is particularly problematic, with much of it attributable to the Strait of Hormuz shutdown.

• Diesel averaged $5.67 per gallon as of May 14, up 60% from a year earlier, according to AAA.
• 70% of farmers cannot afford the fertilizer they need, per the American Farm Bureau Federation.

Consumer Impact: Rising Food Prices and Supply Shortages

For consumers, the crisis is especially noticeable in products like beef. The U.S. cattle herd is at its lowest level in decades, largely due to global drought, per USDA data.

Ground beef averaged about $6.90 per pound in April—roughly 19% higher than a year earlier, according to Bureau of Labor Statistics data.

Lower-income households are "doubly exposed," says Zhang, who is also part of the American Society of Farm Managers.