Justin Benavidez told attendees at the 41st annual International Sweetener Symposium in Vail, Colo., that rising input costs, a stronger dollar, and increasingly efficient global rivals have eroded the cushion American farmers once enjoyed. The message was direct: the industry must find new markets and new uses, not wait for the next crisis.
Why Profit Margins Stopped Keeping Pace
For decades, commodity prices and production expenses moved together. Benavidez flagged a turning point around 2015, when that relationship broke down. Since then, global competitors have expanded output and grabbed market share, while input demand has climbed without a matching rise in input supply.
“When you have an increase in total supply coupled with an increased demand for inputs and not a whole lot of production of those inputs, what you begin to see is a higher cost of production with a lower rate of return,” he explained.
The result is a structural squeeze, not a cyclical one. Margins narrow even in years when harvests are strong, because the cost side of the ledger no longer retreats when grain prices do.
Strait of Hormuz and the Fertilizer Lag
Disruptions to shipping through the Strait of Hormuz have compounded the pressure. The corridor handles roughly one-third of the world’s seaborne fertilizer trade and is a vital conduit for global energy shipments. Higher fuel costs ripple across the entire agricultural commodity supply chain.
Benavidez cautioned that even if the strait reopens, relief will not arrive quickly. Fertilizer bound for the port of New Orleans faces a four-to-six-month lag between the strait clearing and normal shipping resuming. That delay lands squarely in the fall preplant window, potentially reshaping planting decisions for the next crop year.
“It could lead to changes in overall planting choices for next year’s crop,” he said.
Trade Volatility and the Strong Dollar
Trade policy swings have injected uncertainty into global markets and discouraged long-term trading relationships. Layered on top is a decade of sustained dollar strength, which has made US exports more expensive relative to rival suppliers in South America and the Black Sea region.
Benavidez acknowledged bright spots. Corn demand from Mexico remains strong, and record-high mandates under the domestic renewable fuel standard have opened profitable outlets for corn and soybean growers. Weather shocks — Plains drought and Midwest flooding — have also trimmed yields enough to lend price support, even as they hurt individual producers.
“We’re at historically low wheat production in 2026,” he noted. “Low acres, low yield and an increase in overall abandonment have led to historically low wheat production, which is supporting prices but also making it a little less competitive for exports globally.”
Innovation Over Intervention
Federal financial assistance has cushioned recent blows, but Benavidez was blunt that such aid was never meant to be permanent. Long-term viability hinges on producers’ ability to innovate, identify new opportunities, and stay engaged in volatile markets.
“I do truly believe we are still competitive,” he said. “Knowing the costs, marketing at the appropriate moment, taking advantage of short run ups in price are really important because you fundamentally can’t change long-term price without changing supply and demand.”
What Happens Next
Watch the fall preplant window closely. If fertilizer shipments remain delayed into late 2026, expect acreage shifts away from input-intensive crops and toward lower-cost alternatives. Wheat’s historically low production may keep prices firm near term, but reduced export competitiveness could cede more global share to rival suppliers. Meanwhile, renewable fuel standard mandates and Mexican corn demand will likely remain the strongest demand-side anchors for US growers. The broader takeaway from the USDA economist is that agricultural commodity prices can no longer lean on shocks — profitability will have to be engineered through new markets, new uses, and sharper marketing, not geopolitics.
— Isabella Morales, food desk, AXO News