MEMBER VOICE — ARGENTINA

SRA’s economic analysis maps how rising diesel and fertiliser costs are affecting Argentine farm businesses — with projections for the current harvest season and the 2026/27 campaign.

Picture a wheat farmer in the southeast of Buenos Aires province. The harvest season is underway. The truck that hauls grain to port is 300 kilometres away. The fuel to run that truck cost 27% more last month than it did in January. The urea applied to the field cost 60% more. And the decisions that will determine next season’s viability — how much to plant, how much fertiliser to buy — need to be made in the coming weeks, against a price backdrop that nobody can predict with certainty.

This is the picture that WFO member SRA — Sociedad Rural Argentina has set out to document with precision. On 9 April, SRA’s Institute of Economic Studies (IEE-SRA) published a detailed quantitative assessment of how the Middle East crisis is transmitting into Argentine agricultural production costs. Its conclusions are grounded in data, structured by scenario, and offer a granular view of what geopolitical shock means at the level of an individual farm business.

How the shock travels: from Hormuz to the farm gate

The entry point is the Strait of Hormuz — the logistics chokepoint through which 25% of global oil trade passes. When the conflict disrupted maritime traffic through the Strait, energy costs spiked across the board: crude oil up between 40% and 70%, international diesel futures up 63%, urea up to 64% at peak. Agricultural commodity prices — soya, maize, wheat — remained broadly stable. As IEE-SRA notes, this is predominantly an energy shock, with the secondary effect on nitrogen fertilisers driven by the price of natural gas — a resource heavily concentrated in the Persian Gulf region.

In Argentina, the shock arrives through two channels: diesel, which hits immediately through harvest and freight costs; and urea, whose full weight will be felt when farmers plan and purchase inputs for the next season.

Right now: the harvest season squeezes

The 27% rise in domestic diesel prices — from ARS 1,775 to ARS 2,250 per litre between 28 February and 30 March — has landed in the middle of the active 2025/26 summer crop harvest. The Argentine government and major oil companies agreed to freeze domestic fuel prices for 45 days from 1 April, providing a temporary ceiling. But SRA is clear that the freeze is a deferral, not a resolution: when the period ends, prices will be reassessed.

In practical terms, a 27% diesel increase means a 4% rise in harvest operating costs and an 8% rise in agricultural freight costs. For farms 300 km from port, freight per tonne rises from US$35 to US$38. At 800 km, from US$61 to US$65. At 1,100 km, from US$70 to US$76. The further from port, the harder the hit — and it falls disproportionately on maize and wheat, where transport represents a far higher share of crop value than for soya.

Looking ahead: the fertiliser risk for 2026/27

The larger concern is what comes next. Domestic urea prices have risen 60% since the conflict began — from US$530 to US$850 per tonne — reflecting both the international shock and local supply and logistics adjustments. Phosphate fertilisers have shown significantly lower volatility, confirming that nitrogen is the exposed input. And the decisions about how much nitrogen to apply to the 2026/27 fine harvest — wheat, winter crops — need to be made now.

IEE-SRA’s modelling is specific: urea alone adds approximately US$56 per hectare to wheat production costs. Diesel-related costs add a further US$19 per hectare. Together: US$75 additional per hectare, representing a 12% increase in total production costs for farms at 300 km from port — and 13.5% for those over 600 km away.

The scenarios: it depends on how long this lasts

SRA maps three outlooks. If the conflict resolves quickly, the damage concentrates on current harvest and freight costs — significant but manageable. If it persists through the fine harvest planning window, sustained nitrogen prices will stack on top of diesel costs for the 2026/27 winter crop. In a prolonged scenario, the summer crop that follows would also be affected, with the potential for full fertiliser market repricing and higher maritime costs.

As SRA concludes: “the magnitude of the impact will depend on the duration of the conflict and its overlap with productive decision calendars.” This update is part of an ongoing series in which WFO is gathering and amplifying contributions from its member organisations worldwide in response to the Middle East crisis.

About SRA

Sociedad Rural Argentina (SRA), founded in 1866, represents agricultural producers across Argentina’s Pampas region, with a focus on crop farming and livestock production. SRA’s Institute of Economic Studies (IEE-SRA) produces regular policy and market analysis for Argentina’s agricultural sector.