Odd Lots

How War in Iran Will Squeeze America's Farmers Even Further

March 19, 2026

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  • American row crop producers would overwhelmingly prefer the removal of all trade barriers and tariffs to maximize their global competitiveness. 
  • The primary financial squeeze on US farmers stems from stagnant futures prices since 2016 contrasted sharply with massive inflation in input costs, especially land prices which have doubled. 
  • Farmers are adopting a disciplined, risk-management mindset, similar to commodity traders, to navigate tight margins and external shocks like fertilizer price spikes. 

Segments

Sponsor Reads and Intro
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(00:00:00)
  • Key Takeaway: Sponsors for PipeDrive, IBM, and Adobe Acrobat are featured before the main discussion begins.
  • Summary: The episode begins with advertisements for PipeDrive CRM, IBM’s practical AI integration, and Adobe Acrobat’s AI presentation generation features. Hosts Tracy Alloway and Joe Wisenthal formally introduce the episode of Odd Lots.
Farmer Squeeze Context
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(00:02:20)
  • Key Takeaway: The structural hollowing out of small-scale agriculture means independent farmers have significant, legitimate reasons to complain about economic pressures.
  • Summary: The hosts acknowledge the running joke about farmers complaining but validate the severity of the squeeze facing independent producers. Surging fertilizer prices, exacerbated by the situation in Iran, create a poor ratio against corn prices, indicating a clear financial squeeze. This follows previous discussions about high input costs, like fertilizer, which are now being compounded by global turmoil.
Guest Introduction and Academy Focus
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(00:05:10)
  • Key Takeaway: Agris Academy educates producers on risk management and professional grain merchandising, addressing a global knowledge gap in farming operations.
  • Summary: Jeff Kazin and Mike Rohlfsen, founders of Agris Academy, detail their roles in education and consulting, focusing on risk management for producers. Mike Rohlfsen brings extensive experience from Cargill in risk management and global supply chains, having advised nearly 400 farms in North America. Their work aims to help farms manage risk and merchandise grain like professional operations.
Agricultural Calendar Status
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(00:08:03)
  • Key Takeaway: Most US nitrogen fertilizer needed for the upcoming corn belt planting season has already been purchased and positioned, meaning current spot prices do not reflect the full impact of recent supply shocks.
  • Summary: The conversation is set in mid-March, with some early planting underway in the South, while the Upper Midwest remains frozen. A significant portion of nitrogen fertilizer, the most problematic input, is already in the supply chain or pre-bought, insulating US values from the full replacement cost of urea from the Middle East. University of Illinois data suggests around 75% of fertilizer has already been purchased.
Pre-Spike Macro Conditions
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(00:11:21)
  • Key Takeaway: Since 2016, US crop futures prices have remained flat while input costs like land (doubled) and equipment (up 40%) have inflated significantly, creating a structural squeeze.
  • Summary: Land rent, often half the cost to grow an acre of corn in prime areas, is driven up by external investors treating land like gold, supported by subsidized federal crop insurance acting as a downside hedge for farmers. This bidding up of land rent to near-zero margin means that subsequent input shocks, like fertilizer spikes, immediately push farmers into negative territory. Government payments often pass straight through the producer to cover these input and land costs.
Land Ownership vs. Renting
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(00:19:29)
  • Key Takeaway: Prime farmland cash flow no longer supports current land values, forcing farmers into renting strategic parcels while external capital treats land as a low-risk appreciation asset.
  • Summary: Farmers typically own a mix of land, buying strategic parcels across the fence, but high land values ($15,000/acre example) mean a 10% cap rate requires rents that exceed gross revenue. The influx of outside investors seeking low-risk appreciation has divorced land value from its immediate economic cash flow. Productivity gains in North American farming have been essential to keeping commodity prices flat despite these rising input costs.
Trade Patterns and Competition
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(00:25:13)
  • Key Takeaway: Trade disputes, like those with China, inadvertently signal global competitors like Brazil and Argentina to expand capacity, creating a long-term challenge for US exporters.
  • Summary: Tariffs on US soybeans pushed prices up in Brazil, signaling them to expand production, while China strategically buys just enough US beans to keep Brazilian prices in check. Historically, US supply instability (like the Russian embargo) drove foreign capital into alternative markets like Brazil and Argentina for infrastructure development. US row crop producers overwhelmingly desire the removal of all trade barriers to compete effectively based on their inherent productivity advantages.
Labor Costs and Crop Decisions
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(00:31:37)
  • Key Takeaway: Labor costs are a minor factor in mechanized grain farming but are a significant and rising issue in labor-intensive vegetable and livestock sectors.
  • Summary: Grain farming has become highly mechanized, minimizing labor’s impact on the cost per acre. Conversely, crops like vegetables (strawberries, lettuce) and livestock operations face intense pressure from rising labor and immigration-related costs. Crop selection is driven by economics, crop rotation, disease breaking, and crucially, the revenue guarantees provided by federal crop insurance levels.
Grain Storage and Selling
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(00:36:16)
  • Key Takeaway: Grain moves from storage primarily due to immediate cash needs or when flat prices rise significantly, as seen recently following geopolitical news.
  • Summary: Grain movement is dictated by storage capacity constraints and immediate cash requirements, with storage space value flexing based on supply tightness. The high volume of corn stored from a good previous crop led to physical grain piling outdoors in the West when storage was exhausted. Recent price increases, correlated with crude oil movements, have incentivized farmers to sell previously stored grain.
Bankruptcy Factors and Credit
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(00:40:02)
  • Key Takeaway: Current farm bankruptcies are disproportionately driven by structural changes in sectors like dairy, rather than a broad credit contraction affecting grain producers.
  • Summary: Grain farms are generally not facing wholesale equipment sales or bankruptcy-driven distress because the Farm Credit System has not significantly pulled back operating loans. High land equity provides a buffer, and current interest rates, while high, are still competitive relative to risk-free assets. The late 1980s farm crisis involved much higher interest rates and weaker producer balance sheets than the current environment.
Current Farmer Sentiment and Advice
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(00:43:32)
  • Key Takeaway: Farmers are advised to capitalize on current high new-crop price levels and use the strong correlation between crude oil and corn futures to hedge opportunistically during volatile market openings.
  • Summary: Farmers feel threatened by the oligopolistic supplier environment (seed, fertilizer, processing) and policy uncertainty regarding government payments. The primary advice is to hedge a portion of the next year’s crop now while new crop prices are at favorable levels not seen recently. Producers are encouraged to pay close attention to volatile market swings, especially Sunday night futures openings, to win small battles in managing margin.
Concluding Thoughts on Risk
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(00:47:03)
  • Key Takeaway: The key to producer success is shifting mindset from being a speculator to becoming a disciplined risk manager focused on margin, mirroring the culture of established commodity companies.
  • Summary: The Agris Academy approach emphasizes discipline around understanding and managing the farm’s risk profile to stay steady. Producers must adopt the mindset of risk managers rather than speculators to focus on margin protection. This disciplined thought process, which includes managing physical details like cash flow and storage, is what allows long-standing commodity companies to thrive.