Washington, D.C. — Rising gas and fertilizer prices tied to the Trump administration’s war in Iran are driving up costs for rural families, farmers, and consumers across the country, according to a new Center for American Progress analysis. Gas prices rose 52 percent between February 27, the day before the war with Iran began, and May 14, forcing rural households to pay at least $26 more per week at the pump and threatening to push grocery prices even higher in the months ahead.
The economic fallout from the conflict is disproportionately affecting rural America, where households already spend significantly more on gasoline and energy and where farm operations depend heavily on diesel fuel and fertilizer. As oil prices rise and shipping through the Strait of Hormuz remains disrupted, farmers are facing mounting input costs during an already difficult economic period.
“Families in rural communities are already stretched thin, and this conflict is making everyday necessities even more expensive,” said Anne Knapke, senior fellow at CAP and co-author of the analysis. “Higher gas prices, rising fertilizer costs, and more expensive groceries are all contributing to an affordability crisis that this president is making worse every day.”
The analysis finds:
- Rural households are paying significantly more at the pump. Rural households spent 26.7 percent more on gasoline in 2024 than urban households, and CAP estimates they are now paying an extra $26 per week for gas compared with prewar prices.
- The gap between rural and urban fuel costs is widening. The difference between what rural and urban households spend on gasoline has increased from $10 to $16 per week, or $46 to $70 per month.
- Farmers are facing rapidly rising input costs. Diesel accounts for more than 60 percent of farm fuel expenditures, and higher diesel prices mean that farmers in planting season now could be paying at least $350 more per day to operate a single tractor. Fertilizer prices have also surged well above prewar levels.
- Farm financial pressures are intensifying. Farmers experienced one of the largest recent gaps between the rising prices they pay for inputs and the stagnant prices they receive for crops, while rising farm debt and bankruptcies continue to strain the sector. There are 453 farming-dependent counties across the country, and rising fuel and fertilizer costs could force more small and medium-sized farms out of business if disruptions continue.
- Consumers should expect higher grocery prices. Purdue University estimates that a prolonged conflict and sustained energy shock could add 3 to 6 percentage points to food-at-home inflation over the next 12 to 18 months. Already, food-at-home inflation rose to 2.9 percent in April, the highest level since August 2023.
- Low-income households will be hit hardest. The bottom income quintile spent 33 percent of before-tax income on food in 2024, compared with 6.4 percent for the highest-income households, making rising grocery prices especially damaging for working families.
Read the analysis: “The Trump Administration’s War in Iran Is Raising Costs for Rural Communities, Farmers, and Food Production” by Anne Knapke, Mark Haggerty, and Kyle Ross
For more information or to speak with an expert, please contact Christian Unkenholz at [email protected].