Trump Signals U.S. Naval Escorts and Tanker Insurance Amid Iran War Disruption
Iran conflict impacts include Fertilizer markets jolt and surging diesel prices | Trump threatens to cut off trade with Spain | WSJ: Senate Dems push bill to break up major meatpackers
| LINKS |
Link: Video: Wiesemeyer’s Perspectives, Feb. 27
Link: Audio: Wiesemeyer’s Perspectives, Feb. 27
| Updates: Policy/News/Markets, March 4, 2026 |
| UP FRONT |
TOP STORIES
— Trump signals U.S. naval escorts and tanker insurance amid Iran war disruption: Trump says the U.S. Navy could escort tankers through the Strait of Hormuz and backstop insurance to keep oil moving as attacks, insurer pullbacks, and war-risk premiums threaten global energy flows and fuel inflation.
— Trump threatens to cut off trade with Spain: Trump says he may end “all trade” with Spain over its refusal to support Iran-related operations from its bases, and he argues the Supreme Court’s IEEPA ruling doesn’t eliminate broader authority to halt commerce on national-security grounds.
— U.S./Spain agricultural trade: scale and composition: Ag trade is meaningful but modest versus total goods trade — U.S. exports to Spain are concentrated in feed grains and other foods, while Spain ships olive oil, wine, and specialty foods to the U.S., leaving both sides exposed if restrictions materialize.
— Greer: U.S. trade probes to wrap in five months as Trump rebuilds tariff framework: USTR Jamieson Greer says Section 301/232 investigations will be completed within five months to replace court-struck tariffs, as the administration pivots toward more durable, targeted duties.
— Senate Democrats push bill to break up major meatpackers: A WSJ exclusive reports Schumer-led Democrats will propose forcing big processors to separate meat lines, tighten concentration limits, and scrutinize foreign ownership — with high beef prices and tight cattle supply as key political drivers.
FINANCIAL MARKETS
— War markets: Stocks and yields whipsawed as Iran-war headlines drove risk-off moves, then steadied after the administration signaled support for securing shipping lanes; Fed Beige Book is next on the macro calendar.
— Equities yesterday: Major indexes closed lower (Dow -0.83%, Nasdaq -1.02%, S&P 500 -0.94%) after a volatile session tied to energy and geopolitical risk.
— Bayer forecast falls short as litigation and debt weigh on outlook: Bayer guides 2026 EBITDA below expectations, highlighting ongoing Roundup-related costs and balance-sheet strain even as management pursues restructuring.
— Dollar posts strongest two-day gain in nearly a year: Safe-haven demand and a higher-for-longer rate repricing tied to the oil shock boosted the dollar, with geopolitical risk now driving FX as much as Fed expectations.
— Dual mandate in conflict: St. Louis Fed economist Fernando M. Martin argues inflation remains in an above-target regime while labor momentum cools, sharpening the policy tradeoff as long-term yields stay elevated.
AG MARKETS
— Fertilizer markets jolt as Gulf conflict threatens urea supplies: Traders warn Hormuz disruptions could choke a major share of globally traded urea just as seasonal demand peaks, sending NOLA barge prices sharply higher and raising yield-risk concerns.
— Agriculture markets yesterday: Row-crop futures were mostly higher (corn, soy, products), wheat mixed, cotton lower; livestock mixed, reflecting volatile input and macro conditions.
FARM POLICY
— House Ag Committee begins markup of Farm Bill 2.0: Day One of the House Ag markup opened with “tri-partisan” claims from GT Thompson and immediate Democratic pushback, teeing up fights over SNAP, pesticide liability, and state preemption ahead of amendment votes.
FOOD/FARM SECURITY
— Cybersecurity and operational resiliency challenges in agriculture: An NCC Group white paper warns precision ag has created “precision targets,” arguing the sector needs agriculture-specific cyber standards (including work on ISO 24882) as connected machinery and farm data become higher-value attack surfaces.
ENERGY MARKETS & POLICY
— Wednesday: Oil prices climb as Iran conflict disrupts supply: Crude rose again as shipping risks and regional outages dominated, even with Trump outlining escorts and insurance tools that markets see as helpful but not immediate.
— Tuesday energy markets: Brent and WTI surged to multi-month highs as outages, rerouting, and insurer pullbacks hit the Strait of Hormuz system, widening Brent–WTI spreads and tightening refined products.
— Diesel shock ripples through global economy: Diesel outpaced crude as Hormuz-linked constraints and soaring freight/insurance costs blew out crack spreads, intensifying inflation risk across freight-heavy sectors.
— Impact of surging diesel prices on U.S. farmers: Higher diesel directly raises fieldwork, drying, and hauling costs, weakens basis via freight, and compounds input inflation — a fast margin squeeze with limited pass-through power.
CHINA
— China turns to Russian oil as Iran crisis disrupts supply: With Middle East barrels at risk, China may lean harder on discounted Russian crude and potentially draw reserves to buffer supply shocks and stabilize domestic markets.
POLITICS & ELECTIONS
— Texas Senate GOP primary heads to runoff between Cornyn and Paxton: Neither cleared 50%, setting a May 26 runoff that pits an incumbent Senate power center against a hard-charging statewide conservative.
— Texas-19 GOP primary headed to runoff; Texas Ag Commissioner upset: TX-19 heads to a runoff in a safely Republican seat, while Nate Sheets unseated incumbent Sid Miller in the GOP Ag Commissioner primary, positioning Sheets as the party’s nominee for November.
WEATHER
— NWS outlook: A front may trigger showers and severe storms from the southern Plains into the Ohio Valley, while a potent cold front brings wind and mountain snow in the West; above-average warmth spreads across much of the southern U.S. this week.
| TOP STORIES—Trump signals U.S. naval escorts and tanker insurance amid Iran war disruptionWhite House moves to stabilize energy shipping as Gulf conflict rattles oil markets President Donald Trump said the United States is prepared to deploy the U.S. Navy to escort oil and gas tankers through the Persian Gulf and provide insurance coverage for vessels transiting the region. The move is aimed at stabilizing global energy flows as the conflict with Iran disrupts shipping routes and pushes energy prices higher. Trump said U.S. military escorts could begin “as soon as possible” if necessary to protect commercial vessels traveling through the Strait of Hormuz — one of the world’s most critical energy chokepoints. The administration also plans to offer insurance guarantees to shipowners and energy traders worried about attacks or disruptions in the Gulf. The coverage would help offset surging war-risk premiums and encourage tanker operators to continue shipping oil through the region despite escalating hostilities. Energy flows threatened by attacks and insurance pullbacks. The initiative comes after a series of attacks on ships and energy infrastructure tied to the widening U.S./Israeli conflict with Iran. Several tankers have been struck and shipping traffic through the Strait of Hormuz has fallen sharply, while insurers have raised or withdrawn coverage for vessels operating in the region. The Strait of Hormuz handles roughly one-fifth of global oil supply, making any disruption to traffic through the narrow waterway a major threat to global energy markets and inflation. Oil prices have surged in response to the conflict and shipping risks, prompting concern among policymakers about the impact on the global economy and energy costs for consumers. Echoes of past U.S. naval convoys in the Gulf. The proposed escort missions would echo earlier U.S. operations in the Gulf, including the late-1980s convoy program that protected Kuwaiti tankers during the Iran/Iraq War. Administration officials say the goal now is similar: reassure shipping markets, prevent a collapse in tanker traffic, and ensure that oil continues to flow despite rising geopolitical risk in the Middle East. Oil prices surged after U.S. strikes on Iran jolted global markets. It is not the first time tensions in the region have sparked a sharp rally. Crude also jumped in June when Israel and Iran exchanged attacks and the U.S. targeted Iranian nuclear facilities. After that initial spike, however, prices stabilized in the weeks that followed. President Donald Trump has warned the current operation could last for weeks, raising the risk of sustained volatility in energy markets.  —Trump threatens to cut off trade with SpainPresident links move to Spain’s stance on Iran operations and Supreme Court ruling on tariff powers President Donald Trump said Tuesday that the U.S. would move to end “all trade” with Spain, citing what he described as the country’s lack of cooperation with the administration’s military campaign against Iran. Speaking at the White House alongside German Chancellor Friedrich Merz, Trump said that while some European allies have supported U.S. operations in the Middle East, Spain has declined to allow the U.S. to use its military bases. In response, he said, “we’re going to cut off all trade with Spain.” Trump added that he had instructed Treasury Secretary Scott Bessent to “cut off all dealings” with Madrid. The threat comes a day after Spain denied the U.S. access to air bases for “anything not included within the treaty nor outside the UN Charter,” according to Spain’s state-owned broadcaster RTVE. The president also referenced the Supreme Court’s recent decision limiting his use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs. Despite the ruling nullifying IEEPA-based tariffs, Trump argued that the opinion affirmed his broader constitutional authority to end commercial dealings with foreign nations if deemed necessary for U.S. security. U.S. Trade Representative Jamieson Greer, who was present in the Oval Office meeting, agreed that the president has authority to halt trade if required for national security reasons and said his office would act if directed. Trump further criticized the United Kingdom, calling it “very, very uncooperative” in relation to U.S. actions in the Middle East, signaling potential broader friction with European partners as the Iran conflict continues. —U.S./Spain agricultural trade: scale and composition In 2024, Spain imported roughly $29.3 billion worth of U.S. goods overall — including agriculture but also broader merchandise — and the U.S. exported about $23.9 billion of goods to Spain overall. Agricultural exports from the U.S. to Spain are a small subset of that total: according to USDA estimates, Spain imported about $2.2 billion of agricultural and related products from the United States in 2024. Key U.S. agricultural exports to Spain. Principal U.S. agricultural exports include:•Feed grains, especially corn — Spain has been a significant buyer of U.S. corn to feed its livestock sector.•Soybeans and other coarse grains (common in EU grain import lists).• Tree nuts, distilled spirits, seafood products and other consumer-oriented foods also feature among U.S. export categories to Spain. Spanish agricultural exports to the U.S. Spain also sells agri-food products into the U.S. market, though at a smaller scale compared with broader merchandise:• Spain exports an estimated €3.5 billion (≈$3.8 billion) worth of agricultural products to the U.S. annually, with olive oil, wine, and other specialty foodstuffs among the top categories.• Olive oil in particular is significant, accounting for roughly 30 % of those agri-food export earnings. Trade balance in agricultural goods. The agricultural trade balance with the U.S. tilts in Spain’s favor on food products in some reporting periods (e.g., Spain exporting more agri-food products than it imports in some annual snapshots). However, overall merchandise trade (including non-agriculture sectors) typically shows higher U.S. exports and imports due to energy, machinery and other goods being dominant categories. In summary, agricultural trade between the U.S. and Spain is important but modest compared with total merchandise trade. U.S. agricultural exports to Spain are in the low billions of dollars, primarily grains and food products, while Spanish agri-foods like olive oil and wine find a receptive market in the U.S. — at roughly a similar scale. This trade could be significantly disrupted if formal restrictions or a wholesale cutoff of trade were imposed. —Greer: U.S. trade probes to wrap in five months as Trump rebuilds tariff frameworkSection 301 and 232 investigations to replace court-struck levies; global partners seek clarity amid rising uncertainty U.S. Trade Representative Jamieson Greer said the Trump administration expects to complete a series of trade investigations within five months — a timeline designed to rebuild President Donald Trump’s tariff regime after the Supreme Court struck down earlier levies. Speaking during a White House meeting between President Trump and German Chancellor Friedrich Merz, Greer said the administration would finalize investigations within that five-month window, allowing the president to impose new tariffs under more durable legal authorities. Quote of note: “By the time the five-month period has elapsed, we’ll have completed investigations,” Greer said, emphasizing that the administration must examine “unfair trading practices” to protect U.S. economic security. Replacing IEEPA tariffs. Following the Feb. 20 Supreme Court ruling invalidating tariffs imposed under the International Emergency Economic Powers Act (IEEPA), Trump implemented a global 10% baseline tariff under Section 122 of the Trade Act. That authority allows duties for up to 150 days without congressional approval. Trump has indicated he may raise that rate to 15% — the maximum allowed under Section 122 — though the higher rate has not yet been implemented. The administration’s longer-term strategy hinges on trade investigations conducted under:•Section 301 of the Trade Act of 1974, which authorizes tariffs in response to unfair foreign trade practices.•Section 232 of the Trade Expansion Act of 1962, which allows tariffs based on national security concerns. Officials believe tariffs imposed under these statutes would be more likely to survive judicial review. Countries under review. The U.S. has already conducted Section 301 investigations involving China, Brazil and Nicaragua. Greer did not specify additional countries that may face new probes but indicated multiple reviews are underway. President Trump added that “different tariffs on different countries” are forthcoming, signaling a shift from broad-based measures to more targeted, country-specific actions. During the meeting, Trump also joked that he wanted Greer to hit Germany “very, very hard,” before suggesting most countries would seek to preserve trade arrangements reached prior to the Supreme Court ruling. “They all want to stay in the deal, and so we’ll probably be able to do that pretty easily,” Trump said. Global reaction: The renewed tariff push has injected fresh uncertainty into global trade relationships. Several major trading partners have raised concerns that new U.S. duties could violate agreements reached last year aimed at lowering tariffs.The European Union recently froze ratification of its pending trade deal with the U.S., citing the need for greater clarity from the Trump administration regarding its tariff strategy. Greer’s five-month timeline provides the clearest indication yet of how quickly the White House intends to reconstruct its trade enforcement framework — and signals that new tariffs could begin rolling out by mid-year if investigations conclude as planned. —Senate Democrats push bill to break up major meatpackersWall Street Journal exclusive outlines proposal targeting industry consolidation and foreign ownership A group of Senate Democrats led by Senate Minority Leader Chuck Schumer (D-N.Y.) is preparing legislation that would restructure the U.S. meatpacking industry by forcing major processors to split their operations and limit market concentration, according to a Wall Street Journal exclusive reported by Patrick Thomas. The proposal would prohibit companies from processing more than one type of meat — potentially requiring major firms to spin off beef, pork, or poultry divisions into separate companies. The bill would also impose caps on market concentration in the beef sector and grant the Federal Trade Commission authority to order divestitures, including selling plants or spinning off business units. Targeting industry consolidation. The measure would directly affect the dominant firms that currently control most U.S. beef processing:• Tyson Foods• JBS• Cargill• National Beef Packing Company Together, these companies process roughly 80% of U.S. beef, making the sector one of the most concentrated in the American food system. Tyson alone processes about one in every five pounds of chicken, beef, and pork consumed in the U.S. The legislation would also mandate a review of foreign ownership in the meatpacking sector, including Brazilian-based JBS and pork processor Smithfield Foods, which is majority owned by Hong Kong–based WH Group. Political push tied to high beef prices. Schumer and other Democrats are framing the proposal as part of a broader effort to address consumer affordability as beef prices remain elevated. The bill arrives amid increasing scrutiny of the meatpacking sector in Washington. The Trump administration has already launched investigations into possible anti-competitive practices in the industry while pursuing other policies aimed at lowering prices, including increasing beef imports. President Donald Trump recently signed an executive order to quadruple beef imports from Argentina and earlier reduced tariffs on Brazilian beef — moves intended to increase supply, though they have yet to significantly reduce retail prices. Industry backlash and uncertain prospects. Industry groups sharply criticized the Democratic proposal, arguing it would weaken the efficiency of the U.S. food system. Julie Anna Potts, president of the Meat Institute, said breaking up meat processors would raise costs across the supply chain. “This clearly will drive up costs for producers and consumers,” Potts said, calling the proposal “absurd.” While industry officials see the legislation as unlikely to pass in the Republican-controlled environment, some analysts believe it could still push regulators or the Trump administration to take additional steps to reshape the sector. Tight cattle supply complicates price fight. The debate comes as the U.S. cattle herd has fallen to its lowest level in roughly 75 years, according to data from USDA. Years of drought and financial losses during the pandemic led ranchers to shrink herds, constraining beef supply even as consumer demand remains strong. The tight supply has driven cattle prices to record levels, squeezing packer margins and prompting plant closures. Tyson, for example, shut down a large beef facility in Lexington, Nebraska earlier this year and reduced output at its Amarillo, Texas plant, eliminating thousands of jobs. As a result, Washington faces a complex policy challenge: record cattle prices benefiting ranchers but high retail beef prices frustrating consumers, all within a highly consolidated processing industry. |
| FINANCIAL MARKETS |
—War markets: A sharp Tuesday morning selloff in equities eased by the afternoon, and a spike in Treasury yields moderated as the war in Iran continued to drive volatile swings across global markets. An announcement from the Trump administration that the U.S. military would help secure key shipping lanes appeared to calm energy markets, trimming what had been a 9% jump in oil prices. After tumbling as much as 2.5% earlier in the session, the S&P 500 pared losses and was down less than 1% by late trading.
Today, the Federal Reserve releases the Beige Book for the second of eight times this year. The report gathers anecdotal information on current economic conditions from the 12 regional banks.
—Equities yesterday:
| Equity Index | Closing Price March 3 | Point Difference from March 2 | % Difference from March 2 |
| Dow | 48,501.27 | -403.51 | -0.83% |
| Nasdaq | 22,516.69 | -232.17 | -1.02% |
| S&P 500 | 6,816.63 | -64.99 | -0.94% |
—Bayer forecast falls short as litigation and debt continue to weigh on outlook
German pharmaceutical and crop-science giant issues cautious 2026 earnings target amid ongoing Roundup legal costs and restructuring efforts
Germany-based Bayer on Wednesday projected 2026 earnings below market expectations, underscoring the continued financial strain facing the pharmaceutical and agricultural chemicals group as it grapples with costly litigation and heavy debt tied to its 2018 acquisition of Monsanto.
The company said it expects earnings before interest, taxes, depreciation and amortization (EBITDA) before special items of €9.1 billion to €9.6 billion ($10.57 billion) in 2026, based on foreign-exchange rates at the end of 2025. The forecast falls slightly short of analysts’ expectations of €9.67 billion, according to a consensus estimate published on Bayer’s website.
The top end of the company’s projected range is also roughly in line with Bayer’s reported 2025 EBITDA of €9.67 billion, suggesting limited earnings growth as management attempts to stabilize the business.
Chief Executive Bill Anderson has been restructuring Bayer’s management and operating model to revive the company’s lagging stock performance. However, he recently paused a broader strategic review that had raised the possibility of breaking up the conglomerate’s pharmaceutical, crop-science and consumer-health divisions.
Legal liabilities related to Roundup, the glyphosate-based herbicide acquired through Bayer’s $63 billion purchase of Monsanto, remain a central challenge. Last month, Bayer announced a settlement agreement worth up to $7.25 billion aimed at resolving tens of thousands of product-liability claims linked to allegations that Roundup causes cancer.
The ongoing litigation costs — combined with the company’s substantial debt load — continue to weigh on investor sentiment, even as Bayer pursues operational restructuring and legal settlements designed to put years of lawsuits behind it.
—Dollar posts strongest two-day gain in nearly a year
Safe-haven demand, rising oil prices and shifting Federal Reserve rate expectations fuel sharp rebound in the greenback amid escalating geopolitical tensions
The U.S. dollar notched its largest two-day advance in nearly a year as investors flocked to safety amid escalating conflict in the Middle East and renewed inflation concerns tied to soaring energy prices.
The move reflects a classic risk-off trade. As geopolitical tensions intensified and oil markets surged, global investors rotated out of equities and into perceived safe-haven assets — with the dollar emerging as the primary beneficiary. The rally marked the greenback’s sharpest two-session climb since last spring.
Heightened uncertainty surrounding military operations involving Iran and disruptions to shipping lanes in the Strait of Hormuz has unsettled global markets. Oil prices have jumped sharply in response, amplifying concerns about a renewed inflation pulse.
In periods of geopolitical stress, the dollar typically strengthens because of its reserve-currency status and the depth of U.S. financial markets. That dynamic was clearly on display as currency traders increased long-dollar positions.
Oil surge shifts inflation outlook. Crude’s rapid ascent has altered the interest-rate conversation. Rising energy costs risk feeding into headline inflation at a time when the Federal Reserve has been attempting to guide inflation back toward its 2% target.
With oil climbing more than 15% in recent sessions, traders have scaled back expectations for near-term rate cuts. A higher-for-longer rate outlook tends to support the dollar by widening yield differentials versus other major economies.
Treasury yields and equities react. The dollar’s rally coincided with rising Treasury yields, as bond markets repriced the likelihood of monetary easing. Meanwhile, equities experienced sharp intraday volatility, with global stocks under pressure before trimming some losses.
Bottom Line: The interplay between energy markets, inflation expectations and Fed policy is now front and center for currency traders. If oil prices remain elevated, the dollar could retain upward momentum. However, any de-escalation in geopolitical tensions could quickly reverse the safe-haven trade. For now, the greenback’s surge underscores how quickly global capital flows respond when geopolitical shocks intersect with inflation risk and monetary policy uncertainty.
—Dual mandate in conflict — inflation stays elevated as labor market softens
St. Louis Fed’s Fernando M. Martin examines 2026 policy crossroads between price stability and employment
In a new analysis from the St. Louis Fed (link), economist Fernando M. Martin argues that the Federal Reserve’s dual mandate — maximum employment and stable prices — is currently under strain as inflation remains above target while labor market momentum slows.
Inflation: a shift to an above-target regime. Inflation, measured by the 12-month change in the personal consumption expenditures (PCE) index, reached 2.9% in 2025, well above the Fed’s 2% target and marking nearly five years of persistent overshooting.
Martin identifies three inflation regimes since 2012:
• 2012–2020: Below-target inflation averaging 1.5%.
• 2021–2022: Pandemic surge averaging 5.5%.
•2023–present: A new above-target regime averaging 2.7%.
Notably, inflation has not fallen below 2% since March 2021.
A key driver in 2025: tariffs on imported goods. Martin estimates tariffs added 0.4–0.5 percentage points to inflation by December 2025 — roughly half of the overshoot above target. Without tariffs, inflation may have been closer to 2.4%, much nearer to the Fed’s goal.
Labor market: normalization or fragility? The unemployment rate has risen gradually from a low of 3.4% in April 2023 to 4.3% in January 2026 — still historically low compared to the 2012–2019 average of 5.5%.
However, the picture is more nuanced:
• Employment growth has stalled, with nonfarm payrolls essentially flat since December 2024.
• A sharp slowdown in immigration has constrained labor supply.
• Hiring and firing rates remain slightly below long-term averages.
• The job vacancies-to-unemployment ratio has declined to 0.87, down from its post-pandemic peak but still elevated by historical standards.
Martin describes the economy as potentially in a “low-hiring, low-firing” equilibrium — stable for now, but vulnerable if layoffs accelerate.
Monetary policy: rate cuts, but elevated long-term yields. In response to falling inflation and softening labor data, the Federal Open Market Committee began cutting rates in September 2024, reducing the federal funds rate by 1.75 percentage points.
At its January 2026 meeting, the FOMC held rates steady at 3.5%–3.75%, with markets expecting no change in March.
Despite these cuts, long-term rates remain elevated:
• The 10-year Treasury yield has averaged 4.3% since mid-2023, far above its 2012–2019 average of 2.3%.
Martin attributes this to:
• Higher expected inflation
• Higher real (inflation-adjusted) rates
• Potentially higher risk premia
Growing disagreement within the FOMC. The December 2025 Summary of Economic Projections revealed significant disagreement among policymakers:
• End-2026 rate projections range from 2.13% to 3.88%.
• The longer-run median projection for the federal funds rate is 3%, up from 2.5% in 2019.
• This implies a higher neutral real rate (r-star) than in the pre-pandemic era.
The dispersion of views highlights uncertainty about where policy should settle as the economy transitions into what Martin calls a “new postpandemic normal.”
Outlook: the risk of entrenched above-target inflation. Martin concludes that the primary risk facing policymakers is that inflation remains stuck in the current above-target regime, causing expectations to drift upward.
Meanwhile, while employment growth has stalled, traditional labor market indicators do not yet signal outright weakness.
For 2026 and beyond, the outlook remains cloudy. Policymakers must weigh:
• Persistent inflation pressures
• Labor market fragility
• Fiscal policy dynamics
• Productivity gains from AI and automation
• Regulatory and financial system changes
The St. Louis Fed’s analysis underscores the difficult balancing act confronting the Federal Reserve as it navigates competing risks on both sides of its dual mandate.
| AG MARKETS |
—Fertilizer markets jolt as Gulf conflict threatens urea supplies
Disruptions around the Strait of Hormuz raise fears of a global fertilizer squeeze just as Northern Hemisphere spring planting accelerates
Fears of a global fertilizer supply crunch are mounting as the widening conflict involving the United States, Israel, and Iran threatens shipments from the Persian Gulf — a key hub for nitrogen fertilizer production and exports.
The Gulf region accounts for roughly one-third of global exported urea, the world’s most widely used nitrogen fertilizer, according to Josh Linville, a fertilizer market expert at StoneX. With three of the world’s top 10 exporters — Qatar, Saudi Arabia, and Iran — effectively constrained by disruptions around the Strait of Hormuz, traders and analysts say the market is facing a potential worst-case scenario. “This could not happen at a worse time of the year,” Linville said. “There’s never a good time. But this is probably as bad as it gets.”
The timing is especially critical because farmers across the Northern Hemisphere are entering the peak spring fertilizer application window. Delays in shipments moving through the Gulf could prevent cargoes from reaching markets in time for planting-season demand.
Markets have already reacted sharply. Urea barge prices at New Orleans — one of the most liquid fertilizer markets globally — jumped between $50 and $80 per short ton earlier this week, reaching roughly $520 to $550 per ton, according to price-tracking firm Argus.
Quote of note: “It takes a tremendous global event, a massively impactful fear, to cause prices to move like they did,” Linville said, describing the reaction as “justifiable.”
Beyond urea exports, the Gulf region is also a major supplier of natural gas and ammonia used worldwide in fertilizer manufacturing. That raises the risk of secondary cost increases for producers in other regions that rely on Gulf feedstocks.
Analysts say the current disruption could hit farm profitability harder than the fertilizer price spike triggered by Russia’s invasion of Ukraine in 2022. Unlike that episode — when grain prices surged along with fertilizer costs — the Iran conflict is unlikely to boost global grain markets.
If supply disruptions persist, farmers may be forced to cut fertilizer use or switch to crops that require less nitrogen, which could reduce yields. Linville warned that extended shortages could ultimately push some producers out of the market.
The ripple effects are being felt globally. In Australia, much of the fertilizer needed for current planting has already been secured, but farmers will soon begin purchasing urea for cereal crop top-dressing later this year.
Australia imported about 64% of its urea from Gulf producers — including Saudi Arabia, Qatar, the United Arab Emirates, Bahrain, and Oman — in 2025, according to Argus citing government trade data.
—Agriculture markets yesterday:
| Commodity | Contract Month | Closing Price March 3 | Change from March 2 |
| Corn | May | $4.46 1/2 | +3/4 cent |
| Soybeans | May | $11.70 1/2 | +6 1/2 cents |
| Soybean Meal | May | $314.70 | +$1.80 |
| Soybean Oil | May | 62.82 | +8 points |
| SRW Wheat | May | $5.74 | -3 1/4 cents |
| HRW Wheat | May | $5.78 1/4 | +3 1/2 cents |
| Spring Wheat | May | $6.13 1/4 | +3 1/4 cents |
| Cotton | May | 64.04 cents | -55 points |
| Live Cattle | April | $234.125 | +$1.025 |
| Feeder Cattle | March | $357.20 | -7 1/2 cents |
| Lean Hogs | April | $95.75 | +17 1/2 cents |
| FARM POLICY |
—House Ag Committee begins markup of Farm Bill 2.0
Chairman Glenn “GT” Thompson (R-Pa.) opened debate on the Farm, Food, and National Security Act of 2026 as partisan tensions emerged over SNAP policy, pesticide provisions, and state regulatory preemption
The House Ag Committee began its markup of the proposed 2026 Farm Bill 2.0 — formally titled the Farm, Food, and National Security Act of 2026 — on Tuesday evening, March 3, launching what is expected to be a multi-day debate over the package intended to finish farm-policy work left over from last year’s major tax and spending legislation.
The bill is widely viewed as a “skinny” or follow-up farm bill, because many major spending provisions — including higher commodity reference prices — were already enacted in the One Big Beautiful Bill Act in 2025.
Thompson pushes “tri-partisan” farm bill. Committee Chairman Thompson (R-Pa.) opened the session arguing the bill reflects broad stakeholder input and incorporates provisions from numerous bipartisan bills. Thompson said more than 80% of the underlying provisions originated from bipartisan legislation, describing the process as “tri-partisan” — Republicans, Democrats, and agricultural stakeholders. The chairman emphasized the bill’s goal of modernizing agricultural programs, strengthening rural economies, and improving risk-management tools for farmers and ranchers.
Supportive industry groups — including commodity, specialty crop, and farm credit organizations — urged the committee to advance the legislation to provide policy certainty amid low commodity prices and rising costs.
Democratic concerns: SNAP and policy provisions. Ranking Democrats immediately raised concerns about the drafting process and several policy changes. Angie Craig (D-Minn.), the committee’s ranking member, and other Democrats criticized the bill as largely partisan, arguing it could shift costs or responsibilities tied to the Supplemental Nutrition Assistance Program (SNAP) and omit certain bipartisan priorities.
Democratic members also pointed to concerns including:
• Possible SNAP policy changes affecting state responsibilities.
• Lack of provisions addressing farmworker disaster assistance.
• Concerns about forestry and wildfire policies included in the draft.
Key policy fights emerging in the markup. Early debate indicated several major issues will dominate the markup process:
1. Pesticide liability protections. One controversial provision could limit lawsuits against pesticide manufacturers by establishing federal standards affecting state litigation. Critics argue it could weaken legal recourse for health claims tied to pesticide exposure.
2. State regulatory pre-emption. The bill includes language affecting state animal-welfare and food standards, including issues tied to California’s Proposition 12, which has already been a flashpoint in agricultural policy debates.
3. Remaining farm bill titles. Although the major funding changes were enacted previously, the bill still addresses policy across all 12 traditional farm bill titles, including:
• Conservation programs
• Research and innovation
• Specialty crop support
• Rural development
• Credit and risk-management programs
However, the proposal is largely budget-neutral, meaning it reauthorizes programs rather than significantly expanding funding.
What happens next. The markup process is expected to continue into Day Two today (March 4,) when the committee will debate amendments and potentially vote to advance the legislation to the House floor.
If approved, the bill would move to the full House of Representatives. The Senate Agriculture Committee — led by Chairman John Boozman (R-Ark.) — would develop its own version. Differences would likely be resolved in a House/Senate conference committee.
Bottom Line: Day One of the markup was largely procedural and political — opening statements and early policy debates — but it revealed clear partisan divisions, particularly over SNAP, pesticide regulation, and federal preemption of state laws. The real legislative action is expected during amendment votes in the following markup sessions.
| FOOD/FARM SECURITY |
—Cybersecurity and operational resiliency challenges in agriculture
NCC Group’s Rami Riashy warns that precision farming has created precision targets — and calls for sector-specific security standards
A new white paper (link) by Rami Riashy, North America Automotive Consulting Principal at NCC Group, argues that modern agriculture has quietly become one of the world’s most consequential cyber-physical systems — and one of its most vulnerable.
In “The Cybersecurity and Operational Resiliency Challenges in Agriculture,” Riashy draws on more than two decades of experience across automotive, heavy-duty trucking, and agricultural OEMs to outline how precision farming, autonomous tractors, cloud-connected equipment, and GNSS-guided systems have dramatically expanded agriculture’s attack surface.
Agriculture is no longer analog. Riashy emphasizes that today’s agricultural machinery — tractors, combines, sprayers, and autonomous implements — operates as interconnected cyber-physical platforms. These machines rely on ECUs, CAN-based communication, RTK-GNSS positioning, telematics, over-the-air (OTA) updates, and cloud analytics.
But unlike automotive systems, agricultural equipment operates in:
• Offline or low-connectivity environments
• Multi-brand, mixed-fleet ecosystems
• 20–40-year service lifecycles
• Narrow seasonal windows where downtime is catastrophic
Failure during planting or harvest is not merely inconvenient — it can result in crop loss, supply-chain disruption, and significant financial damage
A distinct threat model. The report details a broader threat landscape that extends beyond machinery to cloud platforms, dealer service tools, and manufacturing systems. Key machine-level threats include:
• ECU manipulation and CAN-bus spoofing
• GNSS jamming and spoofing
• Telematics hijacking
• Firmware tampering
• Remote disablement during harvest
Riashy underscores that agricultural data — including yield forecasts, soil telemetry, and planting patterns — now carries geopolitical and economic value. Early access to crop data could enable commodity market manipulation or provide intelligence leverage to nation-state actors.
Regulatory convergence — but gaps remain. While agriculture shares technologies with automotive, it lacks the same regulatory maturity. The paper outlines how frameworks are increasingly affecting agricultural OEMs. However, these standards were not designed for agriculture’s operational realities. To address that gap, a new sector-specific draft standard — ISO 24882 — is being developed to tailor cybersecurity engineering requirements to long-lifecycle, offline-capable agricultural machinery.
Real world incidents underscore the risk. The report references high-profile cases including:
• The 2021 JBS Foods ransomware attack
• Firmware vulnerability disclosures involving John Deere equipment
• The 2018 New Cooperative grain co-op ransomware incident
• The 2025 Marks & Spencer cyberattack affecting food retail operations
These incidents demonstrate how cyber events can disrupt not only machines, but entire food supply chains.
Key structural challenges. Riashy highlights systemic obstacles unique to agriculture:
• Certificate management difficulties in legacy machines
• Limited secure clocks and update mechanisms
• OTA constraints tied to seasonal use
• Runtime security gaps in CAN-based networks
• Shared liability across multi-brand ecosystems
• Fragmented supplier base with lower production volumes than automotive
Broad regulations like the EU CRA impose disproportionate burdens on agricultural OEMs that lack automotive-scale leverage over suppliers
Strategic recommendations. The paper calls for:
• Offline-aware, secure-by-default machine design
• Federated public key infrastructure (PKI) models
• Lifecycle-conscious engineering for decades-long deployments
• Harmonized regulatory alignment across ISO 21434, R155, CRA, and ISO 24882
• Transparent cross-OEM conformance testing
• Integrated cybersecurity and functional safety assessments
Riashy concludes that agricultural cybersecurity must be viewed as a national resilience issue — not merely an IT problem.
Securing food is securing national stability. NCC Group positions itself as a partner in securing cyber-physical systems across agriculture, offering secure system design, threat modeling, penetration testing, regulatory alignment, and 24/7 detection and response services tailored to long-lifecycle machinery environments.
The report’s central thesis is clear: agriculture is now a digitized, interconnected infrastructure sector. Protecting machinery, data, and interoperability across the food production ecosystem is no longer optional — it is foundational to economic stability and food security.
| ENERGY MARKETS & POLICY |
—Wednesday: Oil prices climb as Iran conflict disrupts supply, despite U.S. plan to escort tankers
Energy markets remain on edge as fighting in the Middle East threatens a major global shipping chokepoint, keeping crude prices elevated even as the Trump administration outlines steps to protect maritime trade
Oil prices rose about 3% Wednesday as the expanding U.S.-Israeli war with Iran disrupted Middle East energy flows, though gains slowed after President Donald Trump signaled the U.S. Navy could escort vessels through the Strait of Hormuz.
Brent crude climbed $2.67, 3.3%, to $84.07 a barrel in early trading, extending Tuesday’s surge that pushed the benchmark to its highest close since January 2025.
U.S. West Texas Intermediate crude rose $2.24, or roughly 3%, to $76.80 a barrel — also near recent highs — with both benchmarks gaining more than 5% over the past two sessions.
The escalation intensified Tuesday as U.S. and Israeli forces struck targets across Iran, prompting retaliatory Iranian attacks on regional energy infrastructure. The broader region accounts for nearly one-third of global oil production, amplifying concerns about supply disruptions.
Iraq — OPEC’s second-largest producer — has already cut output by nearly 1.5 million barrels per day due to storage constraints and the inability to export crude. Officials warned the country could be forced to shut in almost its entire 3 million bpd production within days if export routes remain blocked.
Shipping risks have become the central concern for markets. Iran has targeted tankers in the Strait of Hormuz, a critical chokepoint through which roughly one-fifth of global oil and liquefied natural gas trade normally passes. Traffic through the waterway is effectively halted.
The Trump administration is attempting to stabilize the situation. Trump said the U.S. Navy could begin escorting tankers through the Strait and has directed the U.S. International Development Finance Corporation to provide political-risk insurance and financial guarantees for vessels operating in the Gulf.
Market analysts cautioned that restoring normal shipping could take time. ING analysts noted that naval escorts could help reopen the passage, but implementation would not happen immediately.
As a result, the measures have done little to reverse the upward pressure on prices. WTI continues to hold above key technical support levels between $73.40 and $70.70 per barrel.
Countries and companies are already adjusting supply strategies. India and Indonesia are seeking alternative crude sources, while some Chinese refineries are temporarily shutting down or bringing forward maintenance to reduce exposure to supply disruptions.
Meanwhile, U.S. crude inventories increased by 5.6 million barrels last week, according to American Petroleum Institute estimates — significantly above analyst forecasts of a 2.3-million-barrel build. Official government inventory data is expected later Wednesday and could influence near-term price movements.
Despite the inventory increase, traders remain focused on geopolitical risk. With the Strait of Hormuz effectively closed and regional production disruptions mounting, markets are bracing for continued volatility in global energy prices.
—Tuesday energy markets
Oil surges to multi-month highs as Middle East conflict disrupts supply and shipping
Brent crude climbed sharply Tuesday as escalating fighting between Israel, the United States and Iran rattled energy markets and disrupted key oil and gas infrastructure across the Middle East.
Brent crude futures settled up $3.66, 4.7%, at $81.40 per barrel, the highest close since January 2025. Brent has now gained roughly 12% since hostilities began Saturday.
U.S. West Texas Intermediate (WTI) crude rose $3.33, a.7%, to $74.56, its strongest settlement since June.
During trading, Brent briefly surged to $85.12 per barrel — the highest intraday level since July 2024 — before trimming gains after President Donald Trump said many Iranian naval and air assets had been destroyed, suggesting Tehran’s ability to sustain attacks could weaken.
Regional production and infrastructure hit. The conflict widened Tuesday as U.S. and Israeli forces struck additional targets across Iran, triggering retaliatory attacks around the Persian Gulf and in Lebanon.
Energy supplies are being squeezed across the region:
• Iraq, OPEC’s second-largest producer after Saudi Arabia, cut production by nearly 1.5 million barrels per day, with reductions potentially doubling as export disruptions force storage tanks to fill.
• Qatar halted liquefied natural gas production, tightening global gas markets.
•Israel shut several offshore gas fields amid security concerns.
• Saudi Arabia closed its largest refinery, while Saudi Aramco is attempting to reroute crude exports through the Red Sea to avoid the Strait of Hormuz.
Strait of Hormuz disruptions shake markets. Iran has targeted vessels and regional energy infrastructure in and around the Strait of Hormuz, the strategic chokepoint that carries about one-fifth of global oil and LNG trade.
Tanker traffic has plunged as insurers withdraw war-risk coverage, pushing global shipping rates sharply higher. Iranian media reported that Tehran warned it would fire on ships attempting to transit the strait, intensifying concerns over supply disruptions.
Fuel markets and gas prices spike. Refined fuel markets reacted even more strongly than crude:
• U.S. diesel futures jumped about 10%, reaching their highest level since October 2023.
•Gasoline futures climbed nearly 4% to $2.46 per gallon, the strongest since July 2024.
• Refining crack spreads — a key measure of refinery profitability — surged to their highest levels since 2023.
•Global natural gas markets also surged, with Dutch, British, European and Asian LNG benchmarks rising sharply amid the halt in Qatari production and growing concerns about supply security.
U.S. crude export advantage widens. The price gap between Brent and WTI widened to nearly $8 per barrel, the largest spread since November 2022. Analysts say that level strongly favors U.S. crude exports, which typically become competitive in global markets when the Brent premium exceeds about $4 per barrel.
Inventory data in focus. Traders are now watching U.S. supply data for further signals about market tightness. Analysts expect a 2.3-million-barrel build in U.S. crude inventories for the week ended Feb. 27.
With production outages spreading and shipping routes constrained, energy markets remain highly sensitive to developments in the conflict, which threatens deeper and potentially prolonged disruptions to global oil and gas flows.
—Diesel shock ripples through global economy
Iran conflict chokes key fuel artery, sends futures and freight costs soaring
Diesel prices around the world have surged to multi-year highs as the expanding war with Iran disrupts fuel shipments through the Strait of Hormuz, tightening already strained supplies and amplifying inflation risks.
In Europe, benchmark diesel futures jumped a record 34% in just two days, settling Tuesday at $1,009 per metric ton — the highest outright price since 2023.
In the U.S., Nymex diesel futures climbed as much as 16% to $3.37 per gallon, also marking the strongest level since September 2023. Average U.S. retail diesel prices have returned to levels last seen in May 2024.
Strait of Hormuz disruptions tighten supply. The price spike reflects the strategic importance of the Strait of Hormuz, a critical shipping route for refined fuels produced at Persian Gulf refineries. Slower vessel traffic and rising freight insurance costs have constrained global flows at a time when inventories were already thin — particularly on the U.S. East Coast following an unusually cold winter. Shipping rates for petroleum products traveling from the Middle East Gulf to Northwest Europe surged Monday to their highest levels since 2024, further compounding cost pressures.
Diesel’s premium to crude widens. While crude oil prices have rallied broadly, diesel’s gains have outpaced Brent crude, pushing refining margins — known as crack spreads — to their widest levels in more than two years.
European diesel futures traded more than $40 per barrel above crude earlier Tuesday — the widest premium since 2023. Similar expansions in diesel premiums have been recorded in the U.S. and Asia, underscoring the product-specific supply strain.
Analysts warn that flows from Asian refineries processing Persian Gulf crude are now “severely at risk,” with some refiners considering run-rate cuts — a move that would further squeeze global supplies.
Jet fuel and naphtha also climb. The disruption extends beyond diesel. In northwest Europe, jet fuel’s premium to crude oil surged above $60 per barrel — its strongest since 2022. The European Union remains heavily reliant on jet and diesel imports from the Persian Gulf after cutting Russian fuel purchases following the Ukraine war.
Meanwhile, East Asia has seen record-high naphtha premiums relative to Europe. More than 1 million barrels per day of naphtha flowed through the Strait of Hormuz last year, much of it destined for Asian petrochemical producers. Any prolonged disruption would continue to underpin prices in that region.
Inflation and political risk. Diesel — often called the “workhorse fuel” of the global economy — powers freight, heavy industry, agriculture, and backup power generation. Rising prices feed directly into transportation and food costs, increasing inflationary pressures.
With gasoline prices also rising, higher fuel costs present a political challenge for President Donald Trump and congressional Republicans heading into midterm elections later this year. Energy-driven inflation risks complicate broader economic messaging as markets remain volatile amid the Middle East conflict.
In short, while crude oil’s rally has drawn headlines, diesel’s sharper surge signals deeper strain in the refined products market — and a direct hit to consumers and supply chains worldwide.
| Impact of Surging Diesel Prices on U.S. FarmersHigher fuel costs hit fieldwork, harvest, drying and freight — squeezing already tight margins Surging diesel prices are especially painful for U.S. farmers because diesel is the primary fuel that powers modern agriculture — from planting to harvest to transporting grain and livestock.Here’s how the impact flows through the farm economy: 1. Direct impact: higher operating costs Diesel fuels:Tractors and combinesGrain trucks and semisIrrigation enginesGrain dryersLivestock equipment A spike of 30–50 cents per gallon during planting or harvest season can translate into thousands of dollars in added costs per farm, depending on acreage. For row crop producers:Corn and soybean operations are highly mechanized and diesel intensive.Harvest season requires long combine hours and heavy truck movement to elevators. For livestock producers:Diesel powers feed mixing, manure handling, and transport.Rising fuel prices increase feed delivery costs. Unlike many businesses, farmers cannot easily pass these costs on. They are price takers in global commodity markets. 2. Freight and basis pressure Higher diesel prices also:Raise trucking rates to local elevatorsIncrease barge freight on the Mississippi RiverLift rail fuel surchargesIncrease export handling costs When transportation costs rise, local cash grain prices (basis)often weaken as elevators widen margins to cover higher freight expenses.For example:A 10–20 cent weakening in basis can erase already thin profit margins.Export competitiveness declines if U.S. freight costs rise relative to Brazil or Argentina. Given current geopolitical disruptions in the Strait of Hormuz and global diesel crack spreads widening, freight markets are already tightening. 3. Input cost ripple effects Diesel price spikes often move alongside broader energy markets:Nitrogen fertilizer production relies heavily on natural gas and energy.Crop chemicals and seed logistics become more expensive.Equipment parts and maintenance costs rise with freight. If elevated diesel prices persist, farmers could face higher 2026 input contracts, not just short-term fuel pain. 4. Inflation and demand risks Diesel is embedded in the food supply chain. Rising transportation costs:Increase grocery pricesPressure meat and dairy marginsReduce consumer purchasing power If food inflation accelerates, it can dampen demand or shift consumption patterns — indirectly affecting farm commodity prices. 5. Margin stress in a high-interest-rate environment This is particularly concerning given:Elevated borrowing costsTighter working capital conditions in several Fed districtsAlready compressed crop margins Higher diesel costs worsen liquidity stress, especially for highly leveraged operators. Farmers who forward-priced crops earlier may have locked in revenue before this energy spike — but their fuel costs remain exposed unless hedged. Bottom Line: Surging diesel prices function like a direct tax on U.S. agriculture:Higher production costsWeaker basisHigher freightInflation spillovers If the Middle East conflict persists and refined product markets remain tight, diesel could become one of the most immediate margin pressures facing U.S. farmers this season. |
| CHINA |
—China turns to Russian oil as Iran crisis disrupts supply
Middle East conflict threatens Gulf shipments, pushing Beijing toward Moscow and possible reserve drawdowns
China is expected to rely more heavily on Russian crude and potentially tap its strategic oil reserves as the widening conflict involving Iran disrupts energy flows through the Strait of Hormuz.
China — the world’s largest oil importer — sources roughly half of its crude from the Middle East, leaving it exposed to shipping disruptions in the Gulf. With Iranian exports at risk and tanker traffic constrained, analysts say Beijing may increase purchases of discounted Russian oil to stabilize supply.
China also holds sizable oil stockpiles — estimated at about 900 million barrels in strategic and commercial reserves — providing a short-term buffer if supply disruptions persist.
The shift could further strengthen energy ties between Chinese President Xi Jinping and Russian President Vladimir Putin while highlighting the geopolitical ripple effects of the Middle East conflict on global energy markets.
| POLITICS & ELECTIONS |
—Texas Senate GOP primary heads to runoff between Cornyn and Paxton
Neither candidate clears 50% threshold, setting up May 26 showdown for nomination
Texas Republicans will decide their U.S. Senate nominee in a May 26 runoff after neither incumbent Sen. John Cornyn nor Texas Attorney General Ken Paxton secured a majority in Tuesday’s primary.
With most votes counted, Cornyn led the field with about 43%, followed closely by Paxton at 40.5%, according to the Associated Press. Rep. Wesley Hunt finished third with 12.9%, eliminating him from the race.
Under Texas election rules, a candidate must receive more than 50% of the vote to win a primary outright. Because no candidate reached that threshold, the top two finishers — Cornyn and Paxton — will compete in a May 26 runoff to determine the Republican nominee.
The winner will advance to the November 2026 general election, where they will face the Democratic nominee: James Talarico, a state representative and seminarian, won the Democratic Senate primary in Texas on Tuesday, according to the Associated Press, prevailing over Rep. Jasmine Crockett in a race that drew record early turnout and was roiled by Election Day rule changes.
The runoff sets up a closely watched GOP intra-party contest between a longtime Senate incumbent and a conservative statewide official, with national Republicans monitoring the race as they defend the seat in November.
—Results of Key GOP races in Texas-19 and Agriculture Commissioner
TX-19 GOP primary headed to runoff. The crowded Republican primary for Texas’ 19th Congressional District — an open West Texas seat previously held by Rep. Jodey Arrington (R-Texas) — is headed to a May runoff after no candidate cleared 50% of the vote in the March 3 primary.
Tom Sell finished in first place and secured a spot in the runoff, while the second slot will be Abraham Enriquez. The district is strongly Republican, meaning the GOP runoff winner in May will be heavily favored in the November general election.
With most votes counted, the leading candidates were:
• Tom Sell (R) — about 36%
• Abraham Enriquez (R) — about 25%
• Jason Corley (R) — about 19%
• Other candidates split the remaining vote.
Texas Agriculture Commissioner GOP primary. In a major statewide upset, Nate Sheets, a beekeeper and small-business owner, defeated three-term incumbent Texas Agriculture Commissioner Sid Miller in the Republican primary. The Associated Press called the race early March 4, ending Miller’s bid for a fourth term leading the Texas Department of Agriculture. Sheets now becomes the Republican nominee for Texas Agriculture Commissioner and is expected to face Democrat Clayton Tucker, a rancher and founder of the Texas Progressive Caucus, in the November general election.
| WEATHER |
— NWS outlook: Frontal system to bring showers and potentially severe thunderstorms between the southern Plains and Ohio Valley over the next two days… …Potent cold front to cross the western U.S. and Rockies by midweek, producing gusty winds and mountain snowfall… …Above-average temperatures are forecast to become widespread across the southern half of the Nation this week, with some daily record highs from the southern Plains to the Southeast.
