California farmers were already struggling. Then came the Iran war

Shortly after the Iran war started four weeks ago, farming executive Bikram Hundal was beside himself.

The vice president of operations at Sequoia Nut Co. had shipped 15 containers of almonds, walnuts and pistachios from the Port of Long Beach, and he wasn’t exactly sure where they were on the high seas.

Their destination was Dubai’s Port of Jebel Ali, a major trading hub, but the jets, missiles and rockets crisscrossing Middle Eastern skies had diverted one ship to the Netherlands and another to Algeria.

Finally, the remainder of the 300 tons of California nuts worth $1.7 million was offloaded at the Port of Fujairah, also in the United Arab Emirates but on the Gulf of Oman, a bit farther from the fighting.

Now, shipping costs to the region have tripled to $7,500 per container, and Hundal is uncertain when the Tulare County company will get its money.

“They will be slow in paying for those goods, and they told us whatever goods were sold already to them [that] have not shipped, please do not ship those,” he said. “That will impact our cash flow. We have to pay the growers for them.”

Since the start of the war, the average price of a gallon of diesel in California has hit $7.26. Fertilizer prices have risen too.

As the war unfolds in Iran, farmers like Hundal are getting being whiplashed by forces beyond their control, including the cutting off of key export markets and a sharp rise in the cost of doing business.

The war has driven up the price of diesel that fuels trucks and farm and ranch equipment, as well as fertilizers critical for increasing crop yields — leading to fears that if the conflict goes on much longer it could push up prices at the market.

The average price of a gallon of diesel in California has hit $7.26, up more than $2 compared with a month ago. Diesel that powers tractors and other non-road vehicles and engines is typically almost $1 cheaper as it is exempt from certain taxes.

Tara Gallegos, a spokesperson for Gov. Gavin Newsom, blamed the farm economy difficulties on President Trump’s “recklessness” in starting the war.

“California farmers are getting hit twice with higher fertilizer costs and higher fuel costs. Every American will wind up paying for that at the grocery store because these commodities are priced globally,” she said.

Trump has made conflicting statements about the rise in fuel prices, contending that it is a “small price to pay” to pursue his war aims of knocking out Iran, but also saying he wants to wrap up hostilities quickly.

Even before the war, California’s farmers were struggling due to the disruption caused last year by Trump’s tariffs, which hit farmers hard as trading partners responded with their own duties.

California is the largest agricultural state in the nation as measured by the value of its crops, which topped $60 billion for the first time in 2024 — and it was hit with corresponding big losses last year.

The value of the top 13 state agricultural products exported to China — including almonds, pistachios and dairy — fell in aggregate by 64%, or $1 billion, in 2025, according to a recent UC Davis estimate.

Faith Parum, an economist at the American Farm Bureau Federation, said the rise in fertilizer and diesel prices follows last year’s tariff-related trade disruption and several years of natural disasters, including droughts and freezes.

“How do we make sure that we keep farmers in business? Because it is a matter of national security and food security,” she said.

Parum noted that farmers who plant crops such as corn, soy, rice and cotton have experienced nationwide losses of $90 billion since 2023.

Key ingredients for some fertilizers come from the oil-and-gas-rich Middle East, where the war has unsettled markets and supply chains.

Already there are reports that some fertilizers are up by a third or more in price. The rise is taking place in California and across the U.S. even though the country produces the majority of its nitrogen-based fertilizers, which are critical to improving crop yields.

The fertilizers are typically applied by U.S. farmers either as liquid nitrogen, liquid ammonia or as pellets of urea, which is the most common nitrogen-based fertilizer in the world, said Veronica Nigh, chief economist at the Fertilizer Institute.

While the vast majority of liquid nitrogen and ammonia is domestically produced, the U.S. imports about half of its urea, making it susceptible to the Middle East supply shock.

All nitrogen fertilizers are derived from ammonia, which is made using natural gas — with half of all exportable urea supplies coming from the oil-and-gas rich Mideast, where it has to pass through the disputed Strait of Hormuz, she said.

Prices are up worldwide, with fertilizer plants closing in Bangladesh, raising the specter of an urea shortage. That could lead to food shortages first in less wealthy countries, while U.S. consumers might see higher food prices unless the war winds down quickly, Nigh said.

Food prices rose sharply after Russia invaded Ukraine in 2022, but that was largely due to the countries being major grain exporters.

“This is different than anything we’ve experienced before, in that it is not occurring in a single market, and that it is something that is a critical input to growers around the world,” she said.

Sunrise over some of the 14,000 acres of walnut and almond orchards of Sequoia Nut Company and Custom Almonds.

The war is hitting Midwest farmers just as they enter the planting season for crops such as wheat, corn and soybean, and need to apply vast quantities of fertilizer.

California grows those crops too, but the big money is in nuts, produce and other “specialty” crops, leading to a constant demand for fertilizer. “You have price and purchase exposure throughout the year,” Nigh said.

Sal Parra Jr., who helps run his family’s 1,500-acre farm in Fresno County and is operations director at the more than 10,000-acre Bowles Farming Co. in adjacent Merced County, is the kind of farmer Nigh is talking about.

The two farms plant a large variety of crops, including nuts, corn, wheat, cotton, alfalfa and fruits and vegetables — all needing a variety of fertilizers and other nutrients.

The rise in costs are bad enough, but now there are fears that a key liquid fertilizer, UAN-32 — which contains three forms of nitrogen, including liquid urea — could be in short supply.

“We actually have taken the initiative at Bowles to fill as much storage as we have available with fertilizer to try to lessen the blow,” he said, noting his family farm doesn’t have the capacity to store much fertilizer.

There are techniques to stretch supplies by more efficiently applying fertilizer, Parra noted, such as by administering soil treatments, though they are costly.

In addition to rising fuel costs, farmers in the Central Valley say they are stockpiling fertilizer and looking for otherways to fertilize their crops.

“I think that a year like this, where you see fertilizer prices moving the way they’re moving, it may justify using other methodologies,” he said. “I’m going to get very creative with with our fertilizer programs.”

At the same time, he said, the farms are having to absorb higher costs for diesel, which runs pumps, tractors and big rigs carrying crops to market.

Much of what the farms sell is on contract with prices already set, which means those costs will have to be absorbed for now, said Parra, who worries many state crops could see lower sales as prices eventually rise in markets.

“A lot of what we grow are beautiful watermelons, or carrots or tomatoes, and depending on what the price is, people may or may not buy it,” he said.

The economic shocks caused nationwide by extreme weather events, the disruption of export markets and now the war have prompted the industry, including California growers, to seek federal assistance.

A driver hauls almonds in a tractor trailer to the scales to be weighed at Sequoia Nut Company and Custom Almonds in Tulare, Calif, on Thursday.

Trump’s massive tax-cut-and-spending bill last year increased payments to farmers. In December, Trump approved $12 billion in emergency assistance, including $1 billion for the kind of produce, nuts and other specialty crops grown in California.

And just last week, the administration issued an emergency fuel waiver to allow continuing nationwide sales of E15 — a gasoline blended with 15% ethanol, nearly all of which is produced from corn grown by U.S. farmers.

“That is very helpful,” Parum said.

Typically, sales of the gas are restricted during the summer due to the volatility of ethanol and its contribution to smog, but the Farm Bureau maintains that new studies show the blend is non-polluting.

Other relief being sought includes dropping long-standing duties on countries that export fertilizer products to the U.S., such as Morocco, a supplier of phosphates.

The war also is disrupting key markets for growers like Sequoia.

While the Middle East isn’t as large an export market for California farmers and ranchers as Canada, the European Union or Mexico; the United Arab Emirates ranks in the top 10 as the nuts, strawberries and other products exported there are distributed across the region.

Eric Andrade and Bikram Hundal, Vice President of Operations at Sequoia Nut Company and Custom Almonds discuss quality control in the company offices in Tulare, Calif., on Thursday.

Along with almonds and pistachios, walnuts are a staple of the Mideastern diet — and those grown by California farmers are considered the “gold standard,” said Robert Verloop, chief executive of the California Walnut Board and Commission.

The war struck right it the middle of the holiest month on the Islamic calendar, Ramadan, which began Feb. 17 and ended March 19, when consumption is higher.

About 70,000 tons of walnuts were on their way or about to be shipped to the region in the period leading up to and including Ramadan. That accounts for roughly 10% of California’s production, expected to hit $1 billion this year.

Some ships were temporarily diverted to ports in China, India and Europe until new customers are located. Many shipments are now being canceled before being loaded on ships, creating a backlog, Verloop said.

Harpal Singh, left, an employee at Sequoia Nut Company and Custom Almonds, loads almonds into bulk bags.

The war also has closed Mideastern markets as residents fearful of rocket attacks stay home. That has been a factor in reducing consumption, forcing some nuts to be sold elsewhere at discounted prices, he said.

Also, an expected wave of orders that typically follows Ramadan has not materialized, hurting California farmers who might not be able to make up the losses, he said.

“Life is not the same, and it’s not business as usual,” Verloop said. “There an expression in the industry. If you don’t eat it in February, you don’t need twice as much in March.”