Editor’s Note: This is the latest in a series that explores the shifting economic landscape of the specialty crop industry.
According to The Packer’s 2026 Sustainability Insights survey, an overwhelming majority of growers are trapped in a tightening margin squeeze: 45% agree and another 42% somewhat agree that their operating costs are increasing faster than the prices they receive for crops.
When asked which expenses put the greatest financial pressure on their operations today, growers pointed to a triple threat of essential inputs: labor (55%), energy and fuel (53%), and input materials such as chemicals and fertilizer (51%).
Beyond day-to-day pressure, growers cite these same three categories as major barriers to long-term financial viability. Roughly two-thirds of operations report long-haul difficulty managing energy and fuel (64%), input materials (63%) and labor (62%). But labor stands out as the most severe structural threat — with 41% of growers rating labor management as very difficult, compared to 31% for energy and fuel and just 23% for materials.
These survey findings mirror broader national economic distress in agriculture. Earlier this spring, an American Farm Bureau Federation report revealed that 6 in 10 farmers reported worsening finances and another report estimated $7 billion in economic losses for almond, apple, blueberry, lettuce, potato and strawberry growers in the 2025 growing season due to rising costs. Adding to that strain, a recent report from the U.S. Congress Joint Economic Committee Minority notes that American farmers spent $1.4 billion more on diesel fuel during this year’s spring planting season than in 2025.
Unrelenting Costs and the Multiyear Specialty Crop Squeeze
Growers across the country have expressed similar struggles with rising costs in the past few growing seasons. Faith Parum, an economist with the American Farm Bureau Federation, says in the research she’s conducted, specialty crop growers are stuck in a cycle of lower prices for the commodities they grow compared to the expenses to grow them.
“It’s one thing if we have a shock one year to input cost; balance sheets could handle that, but this is the second, third and even fifth or sixth year of really hard times, and that’s when it really starts to wear on farm businesses,” she says.
Joseph Strippoli, horticulture and sales manager with Bowman Fruit Sales in Timberville, Va., says the cost of one fungicide the farm uses essentially from bloom to harvest has gone up 35% in recent years.
“We continue to see our fertilizer and our chemical, our pest management costs increase at this astonishing rate,” he says.
He adds that fertilizer costs have increased by 100% in some instances, noting that some of that increase is related to transportation and fuel costs.
And it’s not just fertilizer or crop protection sprays; costs for orchard posts, trellis supplies, trees, equipment and labor have all risen.
“Growing apples or specialty crops in general has become so cost-prohibitive that if it doesn’t change, we won’t be eating American-grown produce in America,” he says. “We will be importing it.”
“It’s extremely hard to navigate these increases year over year when you don’t know what side of the field they’re going to come from,” he says.
Bret Erickson, executive vice president of Little Bear Produce, says his company has seen a significant increase in input costs for everything from seed to fuel to packaging to drip tape and more. He says increases in goods are nothing new, but the rate these expenses have jumped in the past few years is a major change.
“In the last six years they have exploded while market prices have not kept pace,” he says. “The market is not absorbing the cost of those increases in the same way that producers are absorbing them. Growers are taking on a tremendous amount of the cost of those input increases, and U.S. specialty crop producers’ margins are being squeezed at an unsustainable pace.”
High Stakes and High Costs in the Orchard
Costs of production vary, Strippoli says, depending upon the age of the orchard and also the weather.
“In the state of Virginia, I can grow a fresh, quality, marketable apple for between $1,000 and $1,100 an acre,” he says. “Now, to keep a tree healthy that has no fruit on it to manage fire blight and apple scab, to keep the powdery mildew away and to ensure that it will want to fruit next year, we’re at about $300 an acre. That is for a nonbearing tree.”
He also says other inputs in modern orchard establishment include the posts for trellising a high-density orchard. Pre-pandemic, he estimates 14-foot orchard posts cost around $20 each, but now 12.5-foot posts cost about $40.
While labor might not necessarily be seen as an input cost, Strippoli says it is a key expense of growing fruit. And while there have been some improvements to the H-2A program, a key change in the Department of Labor’s interim final rule is when the Adverse Effect Wage Rate updates occur; rates prior to the rule came out in late December or early January and now come out on July 1. (A more comprehensive breakdown of labor costs is detailed in a previous story in this series.)
“The scary thing is, it is considered a variable cost at this point, because we don’t know what the AEWR rate will be for the harvest season when we file for our H-2A labor contracts in the spring,” he says.
While this spring a freeze caused a loss of crop, the farm had already put about half a year of inputs into the orchard, or roughly $500 an acre, by bloom.
“That is hard, knowing you then have to keep the tree healthy the rest of the year,” Strippoli says. “Last year on trees that we had a similar experience with, our price shot up to around $650 to keep those trees healthy after we realized that we had lost our crop.
“With our diminished crop volume, poor quality due to catastrophic weather and skyrocketing input costs, the only way we can continue to put fresh, nutritious and delicious apples in American homes next year is crop insurance,” he adds.
Strippoli worries that “if input costs do not either change or stabilize over the next coming year, we’re going to see produce costs spike in the retail setting,” which, he says, will cause a shift in greater imports, where production costs are lower.
How Global Mining and Middle East Shipping Hit Local Fertilizer Prices
Parum says through her research, she’s heard some specialty crop growers have opted to do more soil testing to determine whether fertilizer inputs are needed.
“Obviously it is better to apply those nutrients, but if they thought they were in a place where they could maybe skip an application or two, they were going to do that to save that cost,” she says.
Corey Rosenbusch, president and CEO of The Fertilizer Institute, says what makes conversations around the cost of fertilizers complicated is that “fertilizer isn’t a product; it is dozens of products, and each nutrient is very different.”
In April, 63% of fruit and 61% of vegetable growers responding to a Farm Bureau Intel survey reported being unable to afford the fertilizer needed for the growing season.
While row crops use most domestic fertilizer applications, Rosenbusch notes that “a specialty crop grower in the grand scheme of things is a very small percentage of total nutrient use in the United States.”
Rosenbusch says sulfur has been seriously impacted by unrest near the Strait of Hormuz, through which about half of the world’s traded sulfur passes.
“The bigger reason it’s such a hot topic right now is that it is one of the key raw materials to produce phosphate fertilizers,” he says. “So, sulfuric acid is what goes into making MAP and DAP. MAP and DAP had already been a very challenged nutrient because of supply constraints globally.”
Rosenbusch notes that while China produces about 40% of the world’s phosphates, export restrictions and global sulfur shortages have forced phosphate plants in Saudi Arabia, Morocco and the U.S. to idle production.
Unlike other major producing regions that restricted sulfur exports during the crunch, the U.S. and Canada maintained open markets. That prompted foreign industrial mining operations to enter the domestic spot market for sulfuric acid.
“They come here to the U.S. Gulf, and spot prices for some of that sulfur were getting as high as $1,300,” he says. “The math just does not make sense for $1,300 sulfur to be used in producing $600 MAP and DAP to sell. But it does make a lot of sense if you’re talking about nickel or gold [mining] that might be selling for $17,000 or $18,000 a ton.”
This is a major challenge for fertilizer producers, Rosenbusch says, where demand for sulfuric acid has been driven by the global mining operations.
“If you’re growing watermelon in North Carolina, you’re going, ‘Hey, wait a minute. I have a phosphate mine here in my backyard. Why is Chinese nickel mining or the Strait of Hormuz impacting me? The phosphate’s right here,’” he says.
As a globally traded commodity, geopolitical issues and supply shocks in countries such as Russia, the Middle East, China and India impact availability for U.S. growers. Parum says another important thing to keep in mind is what exports out of the Middle East look like, as the situation is quite fluid.
“It’s not just like an interstate lane that opens up and people can start going,” she says. “These ships that are stuck there are going to take a while to get out.”
Diesel Surges Strain Daily Farm Operations
The U.S. Congress Joint Economic Committee Minority report says diesel prices jumped 63% this spring and that the average farmer paid as much as $1,500 more to refill an onsite fuel tank compared to the 2025 planting season.
Strippoli says fuel costs have caused Bowman Fruit Sales to retool operations. He says the company has cut back on non-essential operations such as mowing in the orchard, herbicide applications and shutting tractors off faster.
“We’re making sure that no drop of fuel is wasted, because fuel especially has gone up 20% in the last four months,” he says.
Jon Tester, an organic farmer and former U.S. senator from Montana, recently appeared on an episode of “AgriTalk” to discuss the impact of rising inputs. Tester says his farm fills up its fuel tanks going into winter but recently needed to top off the tank.
“We need to pick up another 500 gallons,” he says. “The price of fuel would make you sit down and take a deep breath. It had increased in cost $1.70 a gallon … That cuts a pretty big hole in your operating budget. People in production agriculture understand that the margins are close even on the best of times and this makes the margins almost non-existent.”
Pivoting Crop Varieties and Strategies for Long-Term Survival
As for the future, Strippoli says the company has taken a deliberate step toward finding a healthy balance between the apple varieties that make sense economically from an input and production cost standpoint as well as what is profitable for the business.
“We’re focusing on core apple varieties that are relatively grower-friendly, with relatively low input costs, within reason, growing our most highly marketable varieties, such as galas and granny smiths, Pink Ladies that return well,” he says.
Tester says it’s important to understand that a lot of growers have opted to leave agriculture because of this inability to balance their books due to soaring input costs.
“If these costs continue like they are, you’re going to see a lot of folks go broke,” he says. “You’re going to see a lot of farms that have been in the family for generations that are selling, and you’re going to see more bigger farms on the landscape.”
Parum says growers continue to face a buildup of economic pressures, noting, “This is a multiyear problem. This isn’t the first shock for these growers. It’s not the first negative on their balance sheet. It’s several and several and so it is hard to weather that storm.”
She says it’s paramount growers have conversations with Extension agents, their ag lenders and close trusted friends as they navigate these headwinds to decide what the best plan is moving forward.
“Just because you’ve always done something that way doesn’t mean that this year you need to keep doing it that way,” she says.
