The US diesel prices surge is creating another challenge for American farmers as the harvest season gets underway. Fuel costs have risen sharply, forcing producers to look for savings wherever possible.
In northeast Missouri, corn, soybean and cattle farmer Addie Yoder operates two combines, three semi-trucks and several tractors during harvest. One combine alone can use about 300 gallons of diesel.
Yoder said she has little choice but to reduce spending in other areas to manage the higher fuel bill.
The pressure is similar in South Dakota. Soybean, corn and cattle farmer Drew Peterson expects to spend as much as $1,500 a day fueling one combine. That is roughly twice what he paid last year.
Diesel Reaches a Record Price
The average US diesel price reached $6.29 per gallon this week, according to Energy Information Administration data. That is up 68% from $3.74 a gallon a year earlier.
Farmers can use off-road diesel, which is exempt from certain state and federal taxes. Even so, many producers are paying considerably more than they did last year.
California vegetable grower Wayne Gularte said his fuel costs have climbed about 40%. His price has increased from roughly $5 to $7 per gallon.
Gularte has responded by bringing some older gasoline-powered tractors back into service. He has also parked one of his diesel pickups to reduce fuel consumption.
Higher Fuel Costs Threaten Farm Margins
Farm fuel expenses have increased by about $11 per acre for corn and $7 per acre for soybeans compared with last year, according to Purdue University agricultural economist Michael Langemeier.
Meanwhile, corn, soybean and wheat futures have risen sharply since mid-August. However, University of Illinois economist Nick Paulson said farm margins remain relatively thin compared with historical averages.
Higher fuel costs could also increase expenses for seed, fertilizer and other inputs next year.
Economist David Ortega of Michigan State University said the impact could extend well beyond farms. Most food in the United States is transported by trucks, and those trucks rely heavily on diesel.
Consumer food prices already rose 2.7% year over year in August, according to the latest Consumer Price Index.
Trucking Costs Add More Pressure
The higher fuel bill is also affecting transportation companies. Refrigerated trucking is particularly exposed because fresh produce, dairy products and meat often require long-distance temperature-controlled transport.
Refrigerated freight rates for apples and pears leaving Washington state’s Yakima Valley have reached a four-year high, according to DAT Freight & Analytics analyst Dean Croke.
Transport costs for produce leaving California are also up between 40% and 120% from a year ago. In some California cities, diesel prices have climbed above $8 per gallon.
Croke warned that independent truckers could struggle to absorb another major increase. Many smaller operators pay fuel costs upfront, leaving them vulnerable when prices rise quickly.
Farmers Seek Government Support
The rising costs have also prompted calls for government assistance. Republican Senator Roger Marshall of Kansas asked Agriculture Secretary Brooke Rollins to provide temporary relief to farmers facing unusually high fuel expenses.
The Agriculture Department said it was examining the issue. Rollins also indicated that the department could announce additional measures in the coming weeks.
For farmers, however, the immediate challenge remains getting crops out of the fields. Harvesting cannot simply be delayed because fuel is expensive.
At the same time, higher diesel costs could eventually move through the wider supply chain. Retailers and freight companies may absorb some increases temporarily, but consumers could face higher prices if elevated fuel costs persist.
