By Ryan Hanrahan
Agri-Pulse’s Kim Chipman reported that “skyrocketing diesel costs are threatening to squeeze farm profits, just as U.S. crop growers were starting to catch a break. The average price of U.S. diesel reached a new all-time high of $5.94 a gallon on Wednesday, up four cents from the prior record set Monday over the travel-heavy Labor Day weekend, according to automobile club AAA. Prices are up 61% from a year ago.”
“Prices are spiking as farmers prepare to fire up fuel-hungry equipment for round-the-clock harvest work this fall. Soaring costs for crop inputs like fertilizer have bedeviled farmers over the last few years, helping trigger grain-market slumps,” Chipman reported. “Ag economists are predicting another downturn for key crops this year as Congress struggles to get billions of dollars in federal aid to growers on top of roughly $12 billion in payments from the Trump administration.”
“Yet in the last few months, a short-lived thaw in U.S.-Iran hostilities brought down fuel prices while a robust global appetite for U.S. corn and soybeans helped spur a rally in crop prices,” Chipman reported. “Last week, the Agriculture Department raised its forecast for 2026 farm earnings, citing higher receipts for key crops and government payments. But now, renewed attacks between Iran and the U.S. in the Middle East are pushing up fuel prices. The volatility has made it tough for ag producers to hedge against higher fuel costs.”
“‘The rise in diesel fuel is going to probably eat up what was able to be made there in the margins,’ Bradley Guse, Wisconsin-based director of BMO’s Agribusiness Group, tells Agri-Pulse,” according to Chipman’s reporting.
Source : illinois.edu