American farmers are planning a significant rotation away from corn and toward soybeans for the 2026 planting season, a direct response to soaring fertilizer and fuel costs driven by the war in Iran. The U.S. Department of Agriculture’s annual Prospective Plantings report, a crucial first look at farmer intentions, was released March 31.
"The conflict in Iran has disrupted the supply of oil and natural gas at the Strait of Hormuz and driven energy prices higher," said Matt Bennett, co-founder of AgMarket.net. Because nitrogen fertilizer is produced from natural gas, "when fertilizer prices jump, corn becomes the more expensive bet and soybeans the cheaper fallback."
The USDA report projects corn acreage will fall 3% from last year to 95.3 million acres, while soybean plantings are expected to climb 4% to 84.7 million acres. The report also showed intentions for all-wheat plantings to fall 3% to a record-low 43.8 million acres, the lowest since records began in 1919. In contrast, cotton acreage is expected to increase by 4% to 9.64 million acres.
The acreage shift comes as farmers grapple with input costs that have escalated since the conflict began in late February. The war has choked off the Strait of Hormuz, a transit point for a third of global fertilizer trade, causing urea prices to spike by nearly 40%, according to a recent Farmdoc daily report from the University of Illinois. On-farm diesel prices are now over $1 per gallon more expensive than at the same time last year.
Acreage Decisions May Shift Further
Analysts caution that the full impact of the geopolitical turmoil may not be reflected in the current numbers. The USDA's report is based on surveys conducted primarily during the first two weeks of March, before the most severe disruptions to energy and fertilizer markets took hold.
"Some acres could shift, but a lot of decisions are already made — and, in many cases, inputs are already purchased or even applied," said Krista Swanson, chief economist for the National Corn Growers Association. She noted that the bigger story might be the impact on 2027, as sustained high costs would affect all farmers' purchasing decisions for the next crop year. The USDA will release an updated acreage report on June 30.
Grain Bins Remain Full
Alongside its plantings report, the USDA released its quarterly grain stocks data, confirming that storage bins remain full following 2025's record harvest.
As of March 1, U.S. corn stocks stood at 9.02 billion bushels, an 11% increase from March 2025. Soybean stocks were up 10% year-over-year to 2.10 billion bushels. The heavy supplies have kept a lid on commodity prices, even as input costs rise, further squeezing farmer profit margins.
This article is for informational purposes only and does not constitute investment advice.
