Last weekend, the U.S. and Israel launched a joint military operation on Iran, known as Operation Epic Fury, which killed their Supreme Leader Ayatollah Ali Khomeini. In a statement on Sunday, the Trump administration said their goal is to “crush” Iran’s current regime.
“The impact of this military operation could be felt for months in the ag market,” according to Karl Setzer with Consus Ag Consulting.
He says the ultimate impact of this combat operation against Iran won’t be determined so much by the fighting itself, but instead, by how long it lasts.
“The longer it continues to last, it will eventually become background noise to the market—like the Ukraine-Russia War right now. We’re five years in, and that conflict really doesn’t make the headlines as much as it used to,” he says.
“What’s also going to be a factor is what we see there as new leadership starts to emerge,” says Setzer. “With Iran, there not done with the fighting there by any means. there will be internal fighting once they try to elect a new leader.”
He says the combat operation in Iran could likely send fertilizer prices even higher—at a time when they’re already sky high. Iran is the number three exporter of Urea in the world.
“Most corn producers have their nitrogen locked in or have their portion of their needs covered for the spring. It’ll be past that, because what happens if we have to top dress or side dress nitrogen to build up for next fall if this continues long enough?” he says.
What’s Setzer’s advice for producers?
“My immediate advice right now is to have patience. Don’t panic. Don’t dump your inventory. Don’t be concerned. If think you missed anything in the market, you haven’t. We have got a lot of growing season in front of us, so we’ve got to get through the market’s initial reaction to the conflict,” he says.
Meanwhile, Setzer points out that USDA’s WASDE Report is due out Tuesday, March 10 and the Quarterly Stocks and Planting Perspectives reports will be released on March 31. He adds that both reports could provide some market potential despite the military operation in Iran.
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