War-Driven Crop Prices Lift Minnesota Farm Profits Despite Soaring Diesel Costs

Minnesota farmers are facing a mixed economic outlook as surging crop prices attempt to offset a dramatic spike in diesel costs. While the price of fuel has more than doubled over the past year, the value of harvests has risen sharply due to international conflicts disrupting global supply chains.

The U.S.-Israeli war against Iran, which began in late February, initially inflated the cost of fertilizer and raised concerns about another unprofitable season. However, the ongoing conflict has since led to crop scarcity, driving up prices for American harvests. Corn futures have increased by approximately 18% since this time last year, while soybean prices have climbed about 27%.

Megan Horsager, 34, is in the process of buying her family farm near Montevideo from her father. Her 750 acres of sugar beets, soybeans, and alfalfa, along with 1,200 acres of corn, showed thick dried crops on a recent Friday. Horsager noted that the current conditions feel different from the previous year, stating, "We’re feeling optimistic."

Not all growers share that optimism. In northwestern Minnesota, severe drought conditions have reduced yields. Pam Vipond, who operates more than 1,200 acres in Mahnomen County, reported that her soybean crop is yielding about half as many dried beans per acre compared to the previous year. She stated that rain stopped falling around the Fourth of July, and that some corn plants west of her farm produced no ears.

The U.S. Department of Agriculture reported on Oct. 13 that 61% of Minnesota’s corn crop is in good or excellent condition. Soybean crops reported the same condition for the comparable week. Data for last year is unavailable due to a government shutdown.

John Griffith, executive vice president of the Minnesota-based cooperative CHS, attributed the price rise to drought and global trade disruptions. He noted that Russia and Ukraine are targeting each other’s economic engines with attacks, which harms exports in Eastern Europe. Griffith explained that this disruption puts fear into the marketplace, which manifests in higher prices.

Dan Glessing, president of the Minnesota Farm Bureau, said the price rise lifted corn from a deficit to a break-even situation and strengthened soybean profitability. However, he warned that fuel prices would consume a portion of those gains. AAA data from Oct. 13 showed Minnesota diesel prices rising from $3.57 to $6.13 a gallon over the past year.

At Horsager’s farm, a combine uses 26 gallons of diesel per hour. Her father, Marc Stevens, said the rise in crop prices should cover the higher fuel expense. Horsager noted that she filled her diesel reserves a month and a half ago when prices were slightly lower. Nathan Hulinsky, a University of Minnesota Extension educator, said many farmers pre-purchased diesel for harvest earlier in the year, but uncertainty remains for future contracts.

The USDA’s Economic Research Service forecasts total crop revenue to rise in 2026. Government support for farmers is also expected to increase from $27.9 billion in 2025 to $47.4 billion in 2026, partly due to the Farmer Bridge Assistance program announced in 2025 after a trade war with China threatened exports.

Horsager said the volatility of recent years made the farm purchase "way harder," as decisions regarding fuel, fertilizer, and seeds involved more risk. Stevens expressed hope that the government could play a less prominent role in farming economics. He stated, "If the government stays out of our way, then those of us who can figure it out will survive and those who can’t will go broke."