Inflation surged in March due to Iran war and tariffs

War-related price pressures worsened inflation in March, which the Federal Reserve was already struggling to regulate, reports Colby Smith for The New York Times.

The Consumer Price Index, or CPI, rose to 3.3% in March, making the Federal Reserve cautious of cutting interest rates. This is the highest monthly gain, 0.9%, since the post-pandemic inflation surge in June 2022.

The Consumer Price Index rose to 3.3% in March 2026. (Click to enlarge)

“Core” inflation, which doesn’t include volatile food and energy prices, rose to 2.6%, an increase from 2.4% last month, which isn’t as alarming to the Federal Reserve.

Policymakers worry that rising energy prices will “spill over into other sectors, affecting inflation more persistently,” Smith reports.

The Federal Reserve is also worried about businesses and manufacturing companies scaling back on hiring to offset rising input costs, potentially threatening the labor market, reports Smith.

The Bureau of Labor Statistics data listed below illustrates how commodity prices reacted to the war before last week's temporary cease-fire.

• International oil benchmark rose 50%, now down to 30% higher than prewar
• Gas prices rose 40% since February
• Energy index rose 11%
• Fuel oil rose 30.7% over the last month
• Other motor fuels including diesel rose 30.8%
• Airfares rose 2.7%, up 14.9% from a year prior

Excess inflation in the core goods category can be explained by recent tariffs, according to researchers at the Federal Reserve.

“Without evidence that inflation is in retreat, the Fed will likely find it hard to justify cutting rates below the current 3.5 percent to 3.75 percent level,” Smith reports. “What could prompt them to act sooner, however, is if the labor market deteriorates rapidly.” 

Maine's bill to pause larger data center projects awaits governor's approval; ban would be the first of its kind in U.S.

Maine's data center bill would pause planned projects in two rural
towns for 18-months. (Photo by Troy Mortier, Unsplash)

If Maine's new data center bill becomes law, the state will become the first in the country to push pause on large data center construction. 

"The Maine Senate took a final vote on April 14 to enact first-of-its-kind legislation banning large data centers in the state until November 2027," reports Julia Tilton of The Daily Yonder. The bill would halt data centers that require 20 megawatts or more of power, including two already planned in the rural towns of Jay and Limestone.

The Maine legislation "would also establish a study group to examine the impact of such facilities and recommend legislative guardrails," reports Jenna Russell of The New York Times. Maine lawmakers have already made data centers "ineligible for certain business tax exemptions." 

Maine Gov. Janet Mills has yet to sign the bill into law, and it's unclear whether she will, given that it would mean halting data center plans already in the works. "On April 10, the governor said that a data center proposed at a retired paper mill in Jay, Maine, must be exempt from the ban while speaking to the press at an event in Bangor, Maine," Tilton explains. "An amendment with that carve-out failed to pass the legislature." The current bill doesn't include any exemptions. 

Like many New England residents, Mainers already deal with a fragile grid and pay some of the highest electricity rates in the country. Advocates of the ban say the moratorium is needed to prevent further increases in electricity costs and to protect communities from environmental hazards associated with AI data centers, such as noise and excessive water use, Tilton reports. Advocates also point to the relatively few jobs data centers produce, even as they gobble up vast resources.

Mills, who is facing a heated Democratic primary race for the U.S. Senate, has "ten days to veto the legislation, sign it into law or allow it to become law without her signature," Russell reports. "President Donald Trump has threatened to sue states and withhold funding if they pass laws restricting the AI growth."

Ag round-up: Nearly 70% of farmers can't afford fertilizer; union and JBS reach deal; real help for stressed farmers

Share of farmers unable to afford all required fertilizer. (American Farm Bureau Federation graph)

Nearly 70% of American farmers report they can't afford all the fertilizer they need this season because of increased input prices due to the war in Iran and an already stressed farm economy, according to an April survey of 5,700 farmers by the American Farm Bureau Federation. "Farmers in the Southern region reported the greatest difficulty securing fertilizer, with 78% unable to afford all needed inputs this season," reports Faith Parum of AFBF. "Producers in the Northeast and West also reported significant challenges, with 69% and 66%, respectively, unable to afford all required fertilizer, compared to 48% in the Midwest.”

In an effort to drill down into why fertilizer prices have increased so dramatically since 2021, the U.S. Department of Agriculture is "working with the Department of Justice and the Federal Trade Commission on ongoing investigations into fertilizer and other agricultural input costs," reports Chris Clayton of Progressive Farmer. USDA Deputy Secretary Stephen Vaden has "continued his criticisms about concentration in the fertilizer industry, calling out The Mosaic Company for announcing it will close phosphorus mines in Brazil. . . . Vaden argued the global market is signaling a need for more supply -- not less. He questioned why a major producer would scale back output under those conditions."

The Greeley plant can process roughly 6,000
cattle per day. (Photo by L. Angharad) 

The local union representing roughly 3,800 beef plant workers in Greeley, Colorado, and meatpacking giant JBS announced a new labor contract agreement early this week, reports Patrick Thomas of The Wall Street Journal. Beef plant workers went on strike on March 16, "seeking higher wages and other workplace changes. . . . The Colorado plant can slaughter about 6,000 cattle a day, representing roughly 5% of U.S. beef-processing capacity." The new agreement includes worker wage increases through 2027 and protects employees from having to pay for their own required protective equipment. The last slaughterhouse strike happened at a Minnesota Hormel plant in 1985. 

Despite the multiple pain points for American soybean farmers in 2026, some of the rising input costs and sinking soybean prices have evolved over the past several years -- only to be exacerbated by tariff levies and the war with Iran, report Eric Ferkenhoff of Lee Enterprises and Josh Kelety of The Associated Press. "Costs, such as equipment, have crept up over time while soybean prices have stayed low." Doug Bartek, a fifth-generation farmer, told reporters, "Our biggest struggles are our inputs, be it fertilizer, seed, chemical or parts. There has been so much drastic markup in all of these. And I just kind of feel like the farmer’s kind of painted in the corner." Many Midwest soybean producers share Bartek’s worries.

Real Farmer Care wants to give farmers the means to
care for themselves. (Graphic by A. Dixon, Offrange)

Are you a farmer in need of some downtime? Do you know a stressed-out farmer who might be forgetting to care for themselves because they're tending to everything else? If either answer is yes, consider nominating yourself or another farmer-in-need-of-care for one of Real Farmer Care's $200 microgrants, writes Nicole Caruth for Offrange. "Think a stress-relieving massage, a pair of sturdy work boots, or just a dinner outing with friends. The grants are small, but can potentially have a big impact." From squeezing tariffs to eye-popping fertilizer costs, U.S. farmers are having a rough year. The brief nomination form is here. 

As energy and fertilizer prices climb, American farmers feel the impact of the county's conflict with Iran

Synthetic urea-based fertilizers are commonly used to provide nitrogen to U.S. crops. American farmers
worry that an extended war with Iran could make supplies scant. (Global Trade Tracker graph)

Whether it's citrus crops in Florida, corn in the American heartland or wheat grown in the Dakotas, U.S. farms, which are thousands of miles from the Straits of Hormuz, are already feeling strained by the U.S.-Israeli war with Iran. The length and intensity of the conflict will determine how deeply American farms and the businesses and consumers that rely on them will be affected. 

"Farmers are now feeling the impact in Iran with not only higher fertilizer prices, but the concern that farmers may not even be able to find enough fertilizer for spring," reports Tyne Morgan of Farm Journal. "As the situation unfolded over the past week, analysts say the reaction across commodity markets illustrated just how closely agriculture is tied to global energy and political dynamics."

The war has already led some U.S. farmers to shift the amount of corn they plan to grow. "Corn is far more fertilizer-intensive than soybeans, particularly when it comes to nitrogen," Morgan explains. "When fertilizer prices rise sharply, the relative profitability of soybeans often improves quickly." Most U.S. farmers use synthetic urea fertilizer or anhydrous ammonia to provide their crops with sufficient nitrogen for high-yield, healthy growth.

Beyond corn, wheat crop farmers generally use hefty amounts of urea-based fertilizer, so those farmers may change how many acres of spring wheat they decide to plant this April. Chip Nellinger, founder of Blue Reef Agri-Marketing, told Farm Journal, "There’s a lot of nitrogen that needs applied on U.S. wheat acres here over the coming three or four months ahead of us.”

U.S. farmers want to see the situation with Iran de-escalate and shipping lanes reopen. Morgan reports, "Much of the global focus right now remains on reopening critical energy shipping lanes and restoring stability to oil markets. . . . If that happens quickly, the agricultural ripple effects may prove temporary."