'Price squeeze': Iran war adds to Montana ag challenges with high fuel, fertilizer costs

Farmers and ranchers across the region, state and country are facing uncertainty as the war in Iran continues for a second month. With rising fuel and fertilizer prices and relatively low commodity prices, agriculturists across the region are feeling the pinch.

Since the Strait of Hormuz was effectively closed by Iran in early March, global oil and natural gas prices have spiked, triggering energy shortages, global trade disruptions, and driving inflation.

The closure has also stunted the shipment of fertilizers, significantly impacting nitrogen-based fertilizer markets.

Fertilizer prices in Montana have risen 30–40% since the war started, according to Andrew Swanson, assistant professor of Ag Policy, Biofuels, and Commodity Markets at Montana State University.

He said that the U.S. imports about 10 percent of its nitrogen fertilizers.

“These price impacts are affecting everyone right now, so that's where there could be quite a bit of a price squeeze for farmers,” Swanson said.

For farmers who proactively purchased fertilizer for the upcoming growing season or applied fertilizer last fall before the war began in February, Swanson said the threat of rising prices is not as acute. However, if the conflict continues, he said, the impact will continue to escalate.

Thirty-one percent of farmers in the western region of the U.S. have secured their fertilizer for the next growing season, according to a Farm Bureau survey. The survey also found that 66% of farmers in the same region reported being unable to afford all needed fertilizers for the upcoming growing season.

To help combat rising fertilizer prices, Swanson suggests conducting soil testing to see if fertilizer is necessary. Additionally, he stressed the importance of monitoring the markets.

“This is something that’s probably going to take at least a year to normalize,” Swanson said. “For farmers, there’s going to be a lot of volatility in the markets, and they’re going to have to really pay attention to that.”

In addition to disruptions in the fertilizer supply chain, Swanson said rising fuel prices are also top of mind for many Montana agriculturists.

Nationally, farm diesel prices have increased by 46% since the end of February, according to the Farm Bureau survey.

In this same period, Swanson said the price of diesel has jumped between $1.50 and $2 a gallon. He said diesel is the primary expense for farmers during the summer and harvest season.

“It’s going to affect farmers directly through the diesel they have to buy for their tractors, but it’s also going to affect the whole supply chain,” Swanson said.

While input costs increase, commodity prices are low, further raising the stakes.

At the start of the Russia-Ukraine war in 2022, wheat prices were around $7 to $8 a bushel. Swanson said this was the last time prices were “pretty good.”

Currently, wheat prices are sitting at about $5 a bushel.

“Farmers are experiencing a big crunch in the last year," Swanson said. "Commodity prices are down, and input costs have remained relatively high. Some of that has been in play for over a year, and to add the war on top of it, it’s all compounding.”

While rising fuel and fertilizer prices and low commodity prices are the primary forces driving stress in Montana agriculture, Swanson said producers are also experiencing a labor shortage.

This year, the Montana Stockgrowers Association hosted the inaugural Montana Agriculture Labor Summit, an event designed to bring together producers, policymakers, and agribusiness workers to address labor gaps.

“If you don't have a long-term employee, you have to keep starting again. It costs time and money to retrain,” Lesley Robinson, president of the MSGA, said. “If you don’t have enough labor, sometimes you have to downsize because you just don’t have enough hours in the day, you don't have enough manpower to get all the work done.”

It is becoming increasingly difficult to find and retain domestic agricultural laborers, Robinson said.

“There’s a shrinking pool of domestic workers,” she said. “Families are smaller now, and agricultural work takes fewer people than it used to with modern machinery. There are fewer people around agriculture than there used to be.”

The dwindling domestic labor force has led more Montana farmers and ranchers to turn to foreign labor, primarily through the H-2A visa program.

In fiscal year 2025, 53 of Montana’s 56 counties had at least one certified foreign agricultural worker. More than 100 certifications were issued in Gallatin County.

“My grandpa used to be able to go into Billings and find American sheepherders who wanted to come work,” Ben Lehfeldt, a fifth-generation sheep farmer from Lavina and president of the American Sheep Industry, said. “Nowadays, there just aren't any available (domestic) people who want to do that work.”

Some 3,500 foreign agricultural workers were certified in Montana, representing a 12% annual growth rate over the last decade, according to the Montana Department of Labor and Industry.

While a certification gives an employer permission to hire a foreign worker, only about 50% of the certifications result in a hire. Therefore, certifications reflect employer demand for foreign labor rather than the actual number of foreign workers in Montana.

“You have to hire domestically first. If you can’t find someone for the job, then you are eligible for an H-2A worker,” Robinson said. “So, they’re not displacing domestic workers.”

H-2A visas are temporary, nonimmigrant visas that allow employers to hire foreign nationals as seasonal or temporary agricultural laborers. Most H-2A visas do not exceed 10 months, setting an end date on the laborer’s tenure and nullifying the possibility of establishing a long-term, reliable workforce.

“These are legal, temporary visas. The worker wants to be here; we want the worker here. It’s all legal, but there’s a heck of a lot of red tape around it,” Lehfeldt said.

To initiate the process, an employer must apply for a domestic job order with the Montana Workforce Services Division between 60 and 75 days before they need the work to start.

Once the Division approves the job order, the employer can submit a temporary labor certification online with the Department of Labor’s Office for Foreign Labor Certification. This step must be completed at least 45 days before work starts.

If the Department of Labor’s Office of Foreign Labor Certification determines the certification is valid, the employer completes a H-2A visa petition with the U.S. Citizenship and Immigration Services.

It is only once these steps have been completed that workers can apply for the H-2A visa with the Department of State and complete consulate interviews in the worker’s home country.

If the workers are approved, they can then travel to the work site.

“Only once all of that has passed can we purchase a ticket to get them up here,” Lehfeldt said.

Over the last two decades, he estimates the Lehfeldt Rambouillet ranch has brought 15 workers over on H-2A visas.

Unlike most H-2A visas, H-2A sheepherder visas allow workers to remain in the U.S. for up to three years. Because of this, Lehfeldt said he’s gotten to know some of the workers well.

“They’re kind of like family members. You get to know their family, what’s going on with their kids back (in their home country), and how the job is important to their overall family, their education, and their well-being,” he said.

Even though he is familiar with the extensive visa process and works with an H-2A visa consulting company to ensure paperwork is submitted correctly, Lehfeldt sometimes struggles to get workers to his ranch on time.

“A lot of pieces can be delayed and impact things here because we need (workers) here April 1, because that’s when we start lambing,” he said. “It’s tough when we’re trying to time things and we're not able to control the schedule in a lot of cases.”

In addition to time, the H-2A process is fiscally costly for employers. Employers are responsible for purchasing flights for workers, paying the USCIS petition fee, consulate processing fees, and providing room and board for workers.

“Each year we’re looking at about $20,000 for four workers,” Lehfeldt said. “The cost is probably more than it needs to be, but the biggest thing is timing. If we could have the timing where you could predict when the workers were here, when all the paperwork was done, we could avoid the delays.”

In addition to funding the visa application and living and travel costs, employers are responsible for paying workers’ salaries.

“Right now, the government mandates the salary based not on our production and what we earn and pay, but on minimum wages set by the Department of Labor. We had to eliminate one of our workers because it was the only way we could afford the mandated salary,” Lehfeldt said.

He estimates he pays each worker $2,200 a month plus room and board.

Agriculture is one of the leading industries in Montana, generating nearly $5 billion in revenue annually.

“If you have farms and ranches that end up selling and going out of production, the negative impact trickles down into the local communities and to the state,” Robinson said. “The bottom line is that we raise food for the nation. The more people who go out of production, the less food is being produced.”

With uncertainty surrounding the future of the war in Iran and the resulting supply chain disruptions, low commodity prices, and labor shortages, Swanson stresses the importance of supporting those in the agricultural industry.

Purchasing food from local producers is one way to show support, he said.

“Here in Montana, we’re a pretty close community. If you’re not someone in ag, you probably know someone in ag,” Swanson said. “Keep them in mind and know they’re probably going through a tough situation right now.”