A trucker, a farmer, and an entrepreneur walk into a global supply shock

0:00Carmen Medina:N.P.R.

0:11Colleen McCauley:This is The Indicator from Planet Money. I'm Darian Woods. And I'm Ricky Mulvey. The U.S.-Israel war with Iran has a grave human cost. And all across the world, there's a growing financial cost too. Higher gas prices, delayed international flights. This is what economists call a supply shock.

0:28Nate DiMeo:The fossil fuels that power our factories, ships, and planes are suddenly a lot more expensive. So we wanted to hear from the people in America whose economic livelihoods are particularly sensitive to the war in the Middle East.

0:43Colleen McCauley:Yeah, oil and gas are inputs into so many things around us. Plastics, fertilizer, even medicines.

0:49Nate DiMeo:So today on the show, we'll hear from a truck driver about rising transportation costs. We'll ask an Iowa corn farmer about what he's doing as fertilizer prices shoot through the roof. And we'll speak with an entrepreneur who's got a few words for you, an alternative to plastics.

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1:27Nate DiMeo:We're on a tour of economic ripple effects from the U.S.-Israel war with Iran, especially as they touch America. And maybe the side effect that's most in our face when we're driving anywhere is what we see on gas station signs. The price of fuel is particularly important for truckers like Forrest Atkinson.

1:47Carmen Medina:I live full-time out of this truck, so it's my home and I just get to go out and have adventures.

1:52Colleen McCauley:When we spoke, she was just delivering some packaging to a factory that makes cheese.

1:59Carmen Medina:And yeah,

2:02Nate DiMeo:as she drives around the US, Forrest is facing higher diesel costs. Diesel prices were up about a third on March 9th compared to a month earlier before the war. And that could mean hundreds of extra dollars each time she fills up her semi-truck. Last week, diesel was$4.86 a gallon.

2:19Colleen McCauley:Her employer does pick up the tab, but she says when prices get really high, they might become choosy about which stations she's allowed to refuel at.

2:29Carmen Medina:When things do get really bad, they'll literally send us a message on our tablets, our e-logs, and say, you're not allowed to fuel here. You're just not allowed to as a company driver. And you can get in a little bit of trouble if you do do that.

2:44Nate DiMeo:As of yet, the company hasn't blacklisted more expensive gas stations. And maybe that's one indicator that energy prices aren't at red alert levels right now.

2:54Carmen Medina:We'll see if that's true. I hope that it is in this case because I do love my job. I do love long haul trucking. And I hope that the prices do get lower because if fuel prices rise, the consumers will probably end up eating that bill.

3:11Colleen McCauley:Right now, Forrest is relieved she's an employed truck driver, not someone who owns their own truck and pays for their own fuel costs.

3:18Carmen Medina:There's just too much unpredictability in the trucking world, especially in 2026. Things are just changing every single week with free patterns and tariffs and now fuel prices. It's definitely probably not a good time to be an owner-operator.

3:32Nate DiMeo:So higher diesel prices, that's a pretty direct increase in costs from the war. And going down another link in the chain, you get higher fertilizer costs too.

3:42Colleen McCauley:Mark Mueller is a corn farmer in Iowa. He uses a lot of fertilizer.

3:46P. J. O'Rourke:It is the single biggest expense I had for raising corn.

3:51Nate DiMeo:Nitrogen fertilizer is most commonly made with natural gas. The problem with natural gas, though, is a lot of it is stuck in the Persian Gulf, which makes 20 % of the world's supply of liquefied natural gas. That's pushing up natural gas prices, which is pushing up fertilizer costs.

4:09Colleen McCauley:Even though the U.S. is a net exporter of natural gas, that doesn't help nitrogen fertilizer prices domestically. Fertilizer is traded globally, so countries like, say, Brazil or India, which might have previously bought from fertilizer plants outside the U.S., would now push up U.S. or Canadian fertilizer prices if they were to buy from North America. And it's bad timing for Mark.

4:30Nate DiMeo:Corn planting season starts in a month, right when he needs to buy fertilizer.

4:35P. J. O'Rourke:The price would be cheaper if I'd bought it months ago, but I didn't know that. That leaves Mark with few options. The fertilizers that I need for growing a corn, I can't do without. I'm pretty much a captive audience.

4:49Nate DiMeo:Mark says he could defer his spending on big equipment like tractors.

4:54Colleen McCauley:In fact, I haven't bought a new tractor in decades. He could also plant soybeans instead of corn. Soybeans get their nitrogen from the atmosphere, not fertilizer.

5:02P. J. O'Rourke:You can make your money back on soybeans, but then you've got another crop coming from Brazil in six months.

5:07Nate DiMeo:Mark reckons that Brazilian competition means soybeans won't pay as much as corn. Plus, you've got all kinds of geopolitics there too, with China's on-again, off-again demand, depending on how the trade war is going.

5:19Colleen McCauley:Along with his own farming, Mark is also the president of the Iowa Corn Growers Association. So he's been monitoring the fertilizer industry as it consolidates. He says when he started farming decades ago, there were about 20 fertilizer companies. Now, there's four. And he worries that less competition means higher prices.

5:38P. J. O'Rourke:The fertilizer industry has us hostage.

5:41Nate DiMeo:They know it. Mark is really squeezed here, and he's seeing other farmers threatened with losing the bank loans they depend on. Mark's not there yet himself.

5:53P. J. O'Rourke:Maybe I'd choose to retire. I'll tell you right now, I'm 67 years old, and I probably could retire. But up to this point, I've made money farming. I enjoy what I'm doing, and I'm not quite sure what I would do if I wasn't farming.

6:07Colleen McCauley:In contrast to Mark, some people are actually positioned to profit from the turmoil. Not because of anything nefarious, just because they're likely to have people wanting more of what they're selling in this crisis.

6:20Nate DiMeo:Yeah, so the higher cost of oil is popping up in less obvious ways. One example is plastic. Because most plastic is made from oil, the cost of that is higher. The price of the main plastic we use, polyethylene, shot up about 30 % in the war's first couple of weeks. Albert Duer is the chairman and CEO of UBQ Materials.

6:41P. J. O'Rourke:Oil in some way or another touches every single facet of our material development.

6:48Colleen McCauley:Albert's company makes a plastic alternative. Mercedes-Benz uses it in its car components. PepsiCo uses the material in its packing crates. And importantly, it doesn't use oil as an input.

6:59P. J. O'Rourke:What we're talking about is a material made out of chicken bones, vegetables, fruit, all of the dirty paper and cardboard that you throw away in your garbage bin, together with all of those mixed plastics that no one knows how to recycle.

7:15Nate DiMeo:The process basically slowly melts the garbage and turns it into a plastic-like material that's called UBQ.

7:22P. J. O'Rourke:A lot of products that we were always used to extracting materials from the planet were now able to make from our own waste.

7:29Colleen McCauley:Albert says the material is already cheaper than plastic, but with the spike in plastic costs due to the U.S.-Israel-Iran war, the relative cost looks even better.