By Guest Author: John Luc-Richmond 

Rising global tensions and shifting trade policies are creating new economic pressures for farmers across Indiana. From sharply increased fuel and fertilizer costs to tariffs impacting equipment and export markets, Hoosier producers are navigating a challenging and rapidly evolving landscape. Understanding these factors and identifying ways to adapt will be key to maintaining profitability in the current environment.

Rising Input Costs

As global fuel exports have remained severely constricted as a result of the United States’ war with Iran, Hoosier farmers are feeling the impacts. As of May 20th, 2026, the average price of diesel in Indiana is $6.074 per gallon, compared to an average price of $3.56 a year ago1. This has led to ballooning fuel bills for tractors and other farm equipment that rely on diesel. In addition, the conflict in the Middle East has also impacted fertilizer prices. Nitrogen fertilizers depend on natural gas as both an energy source for production and as a raw material, so rising fuel costs have driven up the price of commonly used fertilizers such as urea, ammonium nitrate, and urea ammonium nitrate. The Russia-Ukraine war has also continued to play a role in constricting supply and driving up prices, as Russia is a major fertilizer exporter. 

Market Volatility

Unfortunately, increased fuel and fertilizer prices due to the wars in Europe and the Middle East are not the only forces impacting the bottom line of Hoosier farmers. Many of the tariffs that have been imposed by, and on, the U.S. are having negative impacts on the agriculture industry. Currently, there is a 10% baseline tariff in place that applies to imported goods from nearly all countries, as well as a 50% tariff that applies to global steel and aluminum imports2. These matter to farmers as they can raise the cost of farm machinery, replacement parts, irrigation equipment, fencing and construction materials. Additionally, China continues to impose retaliatory tariffs on U.S. agricultural products. These tariffs are currently at 10% for soybeans and result in U.S. agricultural products substantially more expensive than those imported from competitors like Brazil and Argentina. A recent analysis found that over a 12-month period from March 2025 to February 2026, Chinese retaliatory tariffs cost U.S. agricultural exporters nearly $15 billion, with the bulk of these losses coming from the soybean market3. 

A Sustainable Pathway to Profitability 

So, what can Hoosier farmers do? One promising course of action would be switching to regenerative agricultural techniques, such as no-till or low-till farming, cover cropping, crop rotation, diversification, and managed livestock integration. These techniques use less inputs such as fuel, fertilizer, and pesticides which can significantly drive down costs. Additionally, studies have shown that switching to these techniques can lead to long-term yield increases as soil health improves over time. The Marsden Long-Term Rotation Study has been conducted by Iowa State University since 2001 on corn-soybean systems. The study has shown that plots managed with more diverse cover crops, crop rotations, and livestock integration require less fertilizer and herbicide, and have increased corn and soybean yields compared to conventionally managed corn-soybean systems5. Spending less time tilling, spreading fertilizer, and spraying pesticides can also reduce wear and tear on agricultural equipment that can prevent costly repairs or replacements and reduce fuel costs. 

To learn more about transitioning to more sustainable and profitable farming techniques, visit the NRCS Environmental Quality Incentives Program (EQIP) Indiana website here. This program is a voluntary USDA-NRCS initiative that provides agricultural producers and forest landowners with financial and technical assistance to implement conservation practices on working lands, promoting sustainable agriculture and environmental quality. 

Read how one of HEC’s Green Business partners, the Rejoicing Vine, is incorporating regenerative agriculture into their winery.

References:

The latest HEC blogs in sustainable agriculture:

Roots of Change: Why Regenerative Farming is Indiana’s Next Great Harvest
The Farm Bill: America’s Most Expensive Tug-of-War Over Dirt
Congress Gives Summer Gas a Corny Upgrade

Categories: Sustainable Agriculture