The conflict between the United States and Iran, which escalated in late February 2026, is already creating real consequences for global agriculture, as farmers in Australia adjust planting decisions amid soaring input costs-developments that could ripple across Latin America, the United States, and global food markets.

In Australia, one of the world's leading wheat exporters, the shock was immediate: diesel prices nearly doubled to around A$3 per liter, while fertilizers climbed above A$1,600 per ton, forcing farmers to reassess profitability. Producers like Geoff Cosgrove in Western Australia now face critical decisions on crop selection and input investment.

The six-week conflict disrupted global trade flows, particularly through the Strait of Hormuz, a key route for energy, fertilizers, and industrial commodities. This has not only driven up costs but also created uncertainty around supply availability during a crucial planting window.

Australia's winter crop season begins between March and April, with wheat, barley, and canola as key crops. However, rising nitrogen costs are pushing farmers to shift toward less input-intensive crops or reduce planted area. Cosgrove, for instance, started with canola due to better short-term margins and plans to expand into lupins instead of wheat.

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This pattern is emerging worldwide. Farmers in Europe, Asia, and Africa are facing similar pressures, from Italian winemakers dealing with higher diesel costs to Indian farmers being urged to cut fertilizer use and Bangladeshi rice growers struggling with irrigation fuel shortages. The signal is clear: energy shocks are once again feeding directly into global food systems.

For Latin America, the scenario presents both risks and opportunities. Countries like Brazil and Argentina could benefit from tighter global wheat supply if Australian planting declines, supporting prices. However, the region also depends heavily on imported fertilizers, particularly from the Middle East, meaning cost pressures could intensify locally as well.

In the United States, the immediate impact is more limited due to greater energy independence. Still, analysts warn that prolonged disruptions could raise production costs and affect competitiveness, especially for input-intensive crops.

Unlike the Ukraine war, which drove wheat prices above $13 per bushel, current markets remain more subdued near $6 per bushel, supported by strong recent harvests. Yet today's planting decisions may shape future supply constraints, especially if elevated costs persist.

The real risk lies in uncertainty, which is influencing investment, planning, and production strategies worldwide. What is happening in Australian fields is no longer a local issue-it is an early indicator of broader shifts in global agriculture.