Navigating a murky path together.

By Ken Smith, CEO

I have been managing grain, agronomy, and energy markets my entire 35-year career (yes, I am getting old). The war with Iran poses some multi-dimensional risks that are uncommon.
 
Times like these can create a lot of uncertainty across agriculture and the global economy. At IAS, our teams are closely watching these developments and working together across grain, agronomy, energy, and feed to understand what they may mean for our members. I wanted to share a few of the things I am thinking about today:

1. The oil supply disruption (if the conflict lasts more than 4–6 weeks) is something we have not encountered before. In that type of situation, oil prices would likely need to rise high enough to reduce demand by about 10–15%. We are not close to that price level today.
   • If oil prices continue to move higher, corn and soybean prices typically follow. They likely will not move to the same degree as oil, but both markets tend to benefit when energy prices rise.
   • If the conflict is resolved within a 3–4-week window and there is no major infrastructure damage, the oil market would likely fall back below $60 per barrel. That scenario would likely be negative for corn and soybean prices.

2. A significant amount of the world’s nitrogen fertilizer moves through the Strait of Hormuz. We have already seen strong increases in nitrogen prices over the last two weeks. This could impact corn and soybean rotations for the 2026 crop year.
   • While it is difficult to make major planting changes at this point, higher fertilizer prices could still influence acreage decisions and, in turn, corn and soybean prices. The March 31 Planting Intentions Report will be especially important this year as we watch for those potential shifts.

3. Nitrogen prices will be extremely difficult to predict if the war continues. The market had been expecting nitrogen prices to move lower, and this situation makes that outcome much less certain.

4. Like oil, diesel prices will also be difficult to predict. Much will depend on when shipping through the Strait of Hormuz fully reopens. Since the conflict began, diesel prices have increased by nearly $1.30 per gallon. From current levels, there is both upside potential and downside risk.

5. Higher energy prices create both benefits and challenges for the U.S. economy. If the conflict continues for an extended period, higher fuel costs could reduce consumer discretionary spending, which may eventually translate into lower meat demand.

6. Ethanol margins have improved. Being part of a diversified coop puts you in a position to benefit from this.

 
 
The path ahead looks as murky as I have seen in quite some time, and the situation will remain very fluid. I would encourage you to stay in close contact with your IAS grain originator, agronomist, energy manager, and feed sales team.

While none of us can outguess what will happen in the weeks ahead, we can help you think through the decisions in front of you. In my opinion, success in uncertain markets is not about trying to predict every move. It is about understanding the risks, evaluating your position, and making thoughtful decisions along the way.

That is where your IAS team comes in. Our role is to walk alongside you, share what we are seeing in the markets, and help you navigate the opportunities and risks ahead.

We value the trust you place in Innovative Ag Services. As a farmer-owned cooperative, your success drives our success. When we work together, we are stronger.
 
Good days are ahead.
Let’s get there together.