Episode summary
How War in Iran Will Squeeze America's Farmers Even Further | Odd Lots
Odd Lots
· · 48 min · Hosts: Tracy Alloway, Joe Weisenthal · Guests: Jeff Kazin, Mike Rohlfsen
Summary
American farmers are facing a squeeze from several directions at once: fertilizer costs are rising because of the Iran conflict, while crop prices have been stuck near the same level for years, land rents have surged, and trade barriers have shifted demand toward Brazil and other rivals. The guests argue that the result is not a simple crisis of prices, but a structural margin problem that has been building for nearly a decade. Even where farmers have benefited from productivity gains, those gains have mostly been used to offset higher land, equipment, insurance, and financing costs rather than to expand profits.
The guests say most nitrogen fertilizer for the U.S. crop is already in the system, so the current shock is not fully showing up yet in farm budgets, but it still worsens an already tight setup. They also argue that land values have become detached from farm economics, with crop insurance and scale incentives helping push rents to levels that leave little room for profit.
Trade policy is another major theme. The guests say tariffs and embargo-style policies encourage buyers and governments to diversify away from U.S. agriculture, especially by investing more in Brazil and Argentina. Their advice to farmers is to manage risk more like commodities professionals: hedge prices, watch costs closely, and focus on discipline rather than speculation.
Key takeaways
- The guests say fertilizer prices tied to the Iran conflict are adding pressure on top of already thin farm margins.
- They argue that crop prices have barely changed since 2016, while land, equipment, and living costs have risen sharply.
- They say land rents are often bid up to near-zero margin economics, making farmers vulnerable to any input shock.
- Trade barriers are pushing buyers and capital toward Brazil and Argentina, which the guests see as a long-term threat to U.S. exporters.
- Their practical advice is to hedge new-crop sales and treat farming more like disciplined risk management than speculation.
Notable quotes
“We basically since 2016, the futures prices have not changed”
“it is not at all clear that it's going to be enough to offset higher input costs like fertilizer or oil”
“land prices, I don't have these exacts, have probably doubled”
“If you've bid the ground up to a zero margin, and then all of a sudden you have a shock to the fertilizer system, now your theoretical margin”
How the episode opens
Bloomberg Audio Studios podcasts, radio, news. — Hello and welcome to another episode of the OddLotss podcast. I'm Tracy Aloway — And I'm Joe Weisenthal. — Joe, there's a running joke on this podcast. There's a few of them. But one of the running jokes is farmers are always complaining about something.
They are. They are always complaining about something. But you know what?
It's okay. We need to eat to live. Food is pretty important for sort of human civilization flourishing, etc.
So, if the worst is that they complain a little bit about how much uh they're getting for their corn or whatever, I'm okay with that. Well, to be fair, we also know that one of the defining news stories of the past few decades has been the hollowing out of America's small-cale agricultural industry and farmers. So, if you are an independent farmer, there is a lot to complain about to be fair.
Totally. And again, with the caveat that it's always tough, very recently, a couple weeks ago, we did the episode about surging fertilizer prices. In that conversation, you know, we talked about the fertilizer to corn chart and it is not a good ratio.
You know, there are many ways to represent an industry, but if you just wanted one, that's a very clean way. Fertilizer prices way up obviously given the situation in Iran. Corn prices not nearly anywhere close to their all-time highs or anything like that.
So, just by at least one measure, that is a clear squeeze,
Right? So, we recorded our fertilizer episode I guess a week or two ago at this point. I think at the time when we were discussing it, the possibility that the closure of the straight of Hormuz could actually push up fertilizer prices, a lot of people weren't necessarily that aware of this dynamic.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- iran war impacts
- fertilizer prices
- energy prices
- farm risk management
- agricultural tariffs
Companies and tickers mentioned
- Agris Academy
Watch the episode
Watch “How War in Iran Will Squeeze America's Farmers Even Further | Odd Lots” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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