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Ag economist says Ohio’s diesel tax holiday will offer limited relief for the state’s farmers

An ag economist says the recent passage of Ohio’s diesel tax holiday is unlikely to improve the bottom line for the state’s farmers.

Gabriel Lade with Ohio State University says suspending fuel taxes could have unintended consequences.

“On the non-tax fuel, costs could go up if you increase total demand for diesel in the current supply constraint environment that we find ourselves in,” he says. “If the goal is to help farmers, then cutting them a check is a much simpler way to do it.”

He tells Brownfield the move would only save producers an average of 20 cents an acre. 

“Farmers don’t pay highway fuel taxes on any fuel that they’re using in the equipment that’s on their fields,” he says. “On a 1,000-acre operation that’s spending upwards of $15,000 on fuel, you’re talking about saving them $200 to $300.”

President Trump recently signed an executive order expanding the use of tax-exempt red dyed diesel for on-road ag transportation through the end of the year. However, that order does not override Ohio state law.

A group of commodity groups including the Ohio Cattleman’s Association, Ohio Corn and Wheat, Ohio Farm Bureau, Ohio Dairy Producers Association, Ohio Pork Council, Ohio Soybean Association, the Ohio Poultry Association, and the Ohio Sheep Improvement Association recently sent a letter to Governor DeWine asking for relief on red-dyed diesel restrictions during harvest. 

Ohio’s tax holiday began on October 4th and runs through January 2nd, 2027.

AUDIO: Gabriel Lade, Ohio State University