Iowa Farmers Face Record Costs as Washington Fails to Deliver Relief

Iowa's farmers are heading into harvest season with a grim outlook: diesel prices are up 63 percent, fertilizer costs are soaring, and export markets are shrinking. A new report from the U.S. Congress Joint Economic Committee shows that American farmers spent $1.4 billion more on diesel this spring than last year, with the average farmer shelling out an extra $1,500 just to fill the tank. For Iowa's corn and soybean growers, the timing couldn't be worse as combines prepare to roll.

The pain doesn't stop at the pump. Phosphate prices in the Corn Belt have jumped 20 percent this year, driven by a global price war among the five largest fertilizer suppliers: China, Morocco, Saudi Arabia, Russia, and the U.S. Meanwhile, a National Corn Growers Association study found that American farmers paid more than their Brazilian counterparts for nearly every seed and crop protection product between 2023 and 2025. Add in China's retaliatory tariffs, which have slashed U.S. agricultural exports by an estimated $14.9 billion, and Iowa farms are feeling the squeeze from every direction.

Why are Iowa farmers struggling despite high corn prices?

Even with corn prices hitting impressive highs, the cost of production is eating away at profits. The Joint Economic Committee report highlights that input costs have risen faster than commodity prices, leaving farmers with thinner margins. Iowa, along with California and Illinois, has been hit hardest by the export slowdown, according to the report. Farm debt, which rose 9.1 percent in 2024 and 3.8 percent in 2025, is forecast to climb another 4.6 percent in 2026.

“Farmers are price-takers, not price-makers,” said John Johnson, a fourth-generation corn grower in Story County. “We see higher corn prices, but our costs are rising even faster. It's a constant battle just to break even.”

Corporate consolidation squeezes Iowa's family farms

Beyond input costs, Iowa's producers are fighting an uphill battle against corporate power. Just four companies control 85 percent of the beef sector, driving down the prices paid to ranchers while consumers pay more at the grocery store. Over the past three decades, corporate consolidation of farmland has created fewer, larger farms, locking out the next generation of smallholders.

Iowa agriculture groups have called for greater market oversight and fiscal support for over a decade. But both the House Farm Bill, passed in April, and the proposed Senate version have fallen short, failing to address the systemic issues that plague family farms.

Drought and climate pressures add to the burden

The weather isn't cooperating either. This year's spring drought was the worst on record, with 60 percent of U.S. land experiencing moderate to exceptional drought conditions, according to the U.S. Drought Monitor. In the past year alone, the USDA has paid out nearly $18 billion in disaster assistance to farmers and ranchers. Rachel Cleetus, senior policy director at the Union of Concerned Scientists, warns that climate change is “fundamentally altering conditions for U.S. agriculture, creating unprecedented risks and uncertainties for livelihoods of farmers and ranchers.”

At the same time, farmers are being pressured to adopt new technologies to cut carbon emissions. While these changes could bring long-term benefits, the upfront costs are prohibitive for many smallholders, who often bear the risk alone.

What legislative fixes are on the table?

With the Farm Bill failing to deliver, several new proposals aim to level the playing field:

• The Meatpacking Monopoly Breakup Bill would block meatpackers from operating across multiple segments of the industry.
• The Milk from Family Dairies Act would match national dairy production to demand and introduce price floors.
• The Protect Farmland for Farmers Act would bar corporations from using federal agricultural programs.
• The Fairness for Small-Scale Farmers and Ranchers Act would mandate a review of past food-system mergers and impose a moratorium on new ones.

Drought risk is trickier to address. The taxpayer-subsidized Federal Crop and Livestock Insurance Program provides a backstop, but the Government Accountability Office has flagged it as high risk, and those risks are growing as climate conditions worsen.

Alternative finance models offer a glimmer of hope

Beyond Washington, new finance and credit models are emerging to help farmers adopt climate-friendly practices. Some are farmer-led initiatives; others come from startups, agribusinesses, or public-private partnerships. These models aim to improve the business case for sustainability, but they're no substitute for the systemic reforms Iowa farmers desperately need.

For now, Iowa's agricultural community is watching Washington closely, hoping that lawmakers will deliver the relief that the Farm Bill failed to provide. As Johnson put it, “We don't need handouts. We need a fair shot.”