Bangladesh, Aug. 28 -- Americas agricultural heartland is facing a severe financial squeeze as the war with Iran drives up the cost of diesel, fertilizer and other essential farm inputs. After years of weak commodity prices, declining farm incomes and uncertain export markets, the latest energy shock has pushed many US grain producers toward what industry representatives describe as their worst crisis since the 1980s.

The crisis comes at a politically sensitive moment for the United States. With congressional midterm elections approaching in November, economic pain in the rural states could become an increasingly important political issue. Farmers who have traditionally formed a critical constituency for President Donald Trump and the Re...