A year-over-year drop in oil prices is a sign that farmers may get a modest break in the price they will pay for diesel fuel this summer, says Kansas State University agricultural economist Gregg Ibendahl.
“Last year about this time, oil prices were in the $70 range but have since declined and now are in the $60 range,” Ibendahl said in a news release. “That’s a good sign that diesel prices may be more moderate this year compared to last year.”
Ibendahl notes that diesel is one of farmers’ major expense categories to fuel farm equipment. Farmers often buy diesel fuel annually and store it on-farm for use throughout the year.
“And certainly there are times of the year that you can get a better price than at other times,” Ibendahl said.
This summer, he adds, is one of those times to save money on diesel fuel, indicated by the “softening” of oil prices.
“What we’ve seen the last two years is that the price premium for diesel kind of peaks in the winter time, and then it tends to go away or become very small closer to summertime,” Ibendahl said. “Once the summer midpoint has been reached, it starts to go back up again. So, that’s why I’m really seeing diesel prices probably declining between now and summertime.”
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