Kathmandu— American grain farmers are facing their most severe financial crisis in forty years, fueled by rising costs of essential inputs like diesel and fertilizer as a result of the ongoing conflict involving Iran, according to a report from the Financial Times. This latest economic blow comes after years of weak crop prices and declining incomes for producers across the US heartland, with particularly acute impacts felt in the Corn Belt ahead of crucial midterm elections. The situation is compounded by existing trade disputes, drought conditions, and unusually hot weather impacting harvests.

Escalating Input Costs

Farmers are experiencing a dramatic increase in the price of key agricultural inputs since the conflict began. Diesel prices have surged to an average of $5.45 per gallon nationwide, up from $3.81 before the war, according to data from the US Energy Information Administration. Similarly, the cost of phosphorus-rich fertilizer has more than doubled, reaching over $900 per ton compared to approximately $470 a decade ago. Matt Bailey, a Nebraska corn and soybean farmer, described the situation as inputs being “way out of whack.”

Projected Financial Losses

Economists at the American Farm Bureau Federation estimate that growers of nine principal crops will lose around $31 billion in 2026 without federal assistance, with losses projected to climb to $32 billion next year. Corn producers are currently forecast to lose $131 per acre this year and $167 in 2027, while soybean farmers face anticipated losses of $80 and $138 per acre respectively. Pam Johnson, a former president of the National Corn Growers Association, stated that farmers aren’t projected to make any money for the next two years. John Hansen, president of the Nebraska Farmers Union, characterized the downturn as the worst the sector has seen since the 1980s.

Multiple Pressures on US Agriculture

The conflict in Iran is not the sole factor contributing to the financial strain on American farmers. Existing trade disputes, particularly with China regarding soybean demand, have weakened overseas markets. Additionally, drought conditions and unusually high temperatures across parts of the Corn Belt, including Nebraska, are damaging crops and reducing harvest estimates. While corn prices have risen somewhat due to reduced supply forecasts, concerns remain that higher commodity costs will exacerbate existing inflationary pressures.

The Trump administration requested an additional $11 billion in aid for farmers in June, building on previous assistance packages, as the sector navigates these challenging conditions and awaits potential relief.

(With inputs from RT)

Originally published on abcnews.com.np.