US Farm Sector Exposed to Volatile Energy Markets
The US farm sector is facing unprecedented pressure due to volatile energy markets. Escalating tensions in the Middle East have exposed the structural reality that modern American agriculture is deeply dependent on fossil fuels, making every shock in global energy markets a shock to food production as well.
Diesel powers tractors, combines, and irrigation systems, while natural gas provides the feedstock for nitrogen fertilizers. Petroleum is embedded in pesticides, plastics, packaging, and transportation networks that move grain from farms to domestic markets and overseas ports.
The relationship between energy and agriculture has grown even more complex because American farms no longer produce food alone, they also produce fuel. Nearly half of the US corn harvest is processed into ethanol, while almost half of American soybean oil is used in biodiesel and renewable diesel.