U.S. diesel prices have surpassed $6 per gallon for the first time, adding to operating costs for farmers during the heart of the fall harvest.
GasBuddy reported the national average crossed the milestone Thursday as global petroleum supplies continued to tighten. Middle East disruptions, Ukrainian attacks on Russian refineries and fuel export restrictions imposed by Russia and China have contributed to the increase.
U.S. diesel inventories are reportedly about 13% below their five-year average. Diesel refining margins have also reached record levels.
The timing presents another financial challenge for American agriculture. Combines, tractors and grain trucks consume large amounts of diesel during harvest, meaning higher fuel prices directly increase production and transportation expenses.
The added costs could squeeze farm margins already pressured by fertilizer, equipment, labor and other expenses. Increased transportation costs could also affect the movement of grain from farms to elevators and processors.
Higher petroleum prices could provide one potential benefit for agriculture by improving the relative economics of ethanol and renewable diesel. However, that longer-term opportunity offers little immediate relief to producers harvesting millions of acres this fall.
For farmers, the latest increase represents another substantial addition to the cost of completing harvest and moving crops to market.