For farmers, their land is their income, their health insurance, their retirement, and they hope, their legacy.
As Michigan farmers prepare for planting season, higher prices for fertilizer and diesel — both sparked by the war with Iran — are making a stressful planting season for Michigan farmers, some of whom are already barely holding on financially.
Farm diesel prices have jumped from an average of $2.94 a gallon last summer to $4.57 currently, with most of the increase occurring in the two months since the US attacked Iran and the closing of the Strait of Hormuz, through which a quarter of the world’s oil supply normally travels.
That’s a huge difference for farmers with equipment that can suck a half-gallon of diesel or more per acre, a typical acre of corn getting between three and five passes over the course of a growing season. The math for Delmotte, who farms 1,200 acres: an additional $6,000 to $10,000 in fuel costs.
Between 20% and 30% of the world’s fertilizer also travels through the Strait of Hormuz. With that supply stalled for now, fertilizer prices have jumped as much as 49%.
Between fuel and fertilizer price hikes, the average farmer could pay $22,000 more this season, according to Michigan Ag Today. Prices of both diesel and fertilizer have continued to rise since that estimate was made in early April.
Although farmers and other landowners may be the most visible local beneficiaries of wind and solar projects, meaningful economic gains extend to broader communities. Rural municipalities and counties receive tax payments that help fund road maintenance, schools, and other public infrastructure and services. Energy projects also create construction jobs and long-term local employment opportunities. In addition to tax payments and jobs, some energy projects use community benefits agreements and other negotiated commitments to align projects with local priorities and deliver benefits that meet local needs.
The chart below illustrates the approximate direct economic benefits that a 100 MW wind project can generate for farmers and rural communities over a 25-year operating life. The benefits of a solar project are comparable.
- Land lease payments provide farmers with predictable annual revenue that supplements earnings from agriculture and other land use. Some farmers structure contracts with royalty payments, which are tied to energy production.
- Tax payments from energy projects give town and county governments more capacity to invest in public services. In Howard County, Iowa, three wind projects totaling 244 MW paid $2.7 million in taxes in 2024, equal to 14.5% of the county’s total tax revenue. The scale and visibility of these benefits depend on state and local tax design, revenue-sharing rules, and whether funds translate into improvements residents can clearly see.
- Operations and maintenance wages from jobs that provide steady employment over the lifetime of energy projects keep skilled workers in the community year-round and long after construction is complete.
- Construction wages paid during a project’s build phase bring money into rural communities.
