The geopolitical landscape took a violent turn on Feb. 28, 2026, when a series of joint U.S.-Israeli strikes targeted Iran’s nuclear and military infrastructure. In a swift and aggressive retaliation, Tehran launched drone and missile strikes against U.S. military assets across the Middle East, effectively disrupting the Strait of Hormuz, a chokepoint for global energy and critical industrial materials.
The intensifying conflict in recent weeks has put the global economy in a pincer movement of rising energy costs and disrupted supply chains across industries.
While many remain focused on soaring energy prices, agriculture is another sector facing shockwaves as the conflict continues, putting increasing pressure on the U.S. food supply chain.
Just as the industry was beginning to recover from years of post-pandemic volatility and the fallout of the Ukraine war, this new Middle Eastern "Production Shock" has once again put the spotlight on companies trading in this industry and, by extension, agricultural exchange-traded funds (ETFs).
Before diving into the specifics of these ETFs, it is essential to gauge whether the industry’s hard-won recovery is at risk of being derailed or if this crisis is merely a 'blip' in its long-term growth trajectory. To understand the true extent of the war’s impact, we must examine the specific pressure points currently straining the agricultural engine and how that puts agricultural ETFs under investors’ radar.
How War With Iran Is Impacting U.S. Agriculture
As mentioned earlier, the Strait of Hormuz is far more than an oil shipping lane and the U.S. agricultural industry does depend on it. According to the Fertilizer Institute, the strait is a critical passage for about 50% of global urea fertilizers, a key input for corn and other staple crops.
With the strait effectively impassable since the conflict began, this supply line has been severed, leaving U.S. farmers to pay significantly higher costs. Matt Frostic, a Michigan farmer and board member of the National Corn Growers Association, told CNBC he purchased nitrogen fertilizer in January for around $350 per ton. The same product, he noted, is now closing in on $600 per ton, reflecting a surge of more than 70% in just 90 days.
The disruption extends beyond fertilizer. Natural gas prices have spiked due to the conflict, raising the cost of energy needed to produce these inputs.
Prolonged financial pressures are pushing American farmers under a huge debt load, which they are also struggling to repay for a longer period of time. As per a report by the American Farm Bureau Federation, published in February 2026, the USDA estimates that total farm debt will rise 5.2% to a record $624.7 billion in 2026, highlighting the financial backing farmers need under current conditions.
This debt burden may rise further, as the ongoing conflict has disrupted the global food supply chain for nearly three weeks.
Amid this backdrop, U.S. farmers are facing a classic cost-price squeeze, where input costs rise while crop revenues remain soft. With the spring planting season underway, geopolitical decisions made in the coming weeks will have lasting implications for harvests, food prices and the bottom lines of agribusinesses across the food supply chain.
The Case for Agricultural ETFs
For investors, the current crisis presents a complex landscape and calls for closer attention to agricultural ETFs, which provide diversified exposure to the sector without relying on individual companies or commodities. Historically, these ETFs have been sensitive to supply shocks, and the current disruption mirrors the period following Russia’s invasion of Ukraine in 2022, when fertilizer and grain prices surged.
However, a crucial difference lies today. As former USDA chief economist Joe Glauber noted to CNBC, the 2022 shock coincided with record-high grain prices, which helped offset farmers’ higher input costs. Today, grain prices have not seen a similar spike.
This suggests that the financial strain will fall more heavily on producers, potentially accelerating consolidation and pressuring margins for smaller operators. In contrast, large-scale farming operations with stronger access to capital and supply chains are better positioned to weather the storm.
Considering the above discussion, prudent investors may want to keep an eye on the following ETFs:
iShares MSCI Agriculture Producers ETF VEGI
This fund, with net assets worth $122.2 million, offers exposure to 128 companies that produce fertilizers and agricultural chemicals, farm machinery, and packaged foods and meats. It traded at a volume of 0.39 million shares in the last trading session.
VEGI has gained 21.8% over the past year, but lost 4.4% since February-end. The fund charges 39 basis points (bps) as fees.
VanEck Agribusiness ETF MOO
This fund, with net assets worth $1.07 billion, offers exposure to 58 companies involved in agri-chemicals, animal health and fertilizers, seeds and traits, from farm/irrigation equipment and farm machinery, aquaculture and fishing, livestock, cultivation and plantations (including grain, oil palms, sugar cane, tobacco leafs, grapevines, etc.), and trading of agricultural products. It traded at a volume of 0.64 million shares in the last trading session.
MOO has surged 23% over the past year, but lost 3.8% since the end of February. The fund charges 55 bps as fees.
Invesco DB Agriculture ETF DBA
This fund, with a market value worth $969.7 million, offers exposure to futures contracts on some of the most liquid and widely traded agricultural commodities. It traded at a volume of 2.68 million shares in the last trading session.
DBA has gained 0.9% over the past year and 3.7% since February-end. The fund charges 83 bps as fees.
Teucrium Agricultural Strategy No K-1 ETF TILL
This actively managed ETF, with net assets of $21.55 million, invests in futures contracts tied to agricultural commodities, including corn, wheat, soybeans, and sugar. It traded at a volume of 0.36 million shares in the last trading session.
TILL has gained 0.8% over the past year and 6.4% since the end of February. The fund charges 89 bps as fees.
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VanEck Agribusiness ETF (MOO): ETF Research Reports
iShares MSCI Agriculture Producers ETF (VEGI): ETF Research Reports
Invesco DB Agriculture ETF (DBA): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).