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Ag economists: diesel export ban could have unintended consequences

U.S. President Donald Trump says he favors a ban on diesel exports, but ag economists say keeping more fuel in the United States won’t necessarily translate into lower prices.

USDA Chief Economist Justin Benavidez told Ag Outlook Forum attendees export bans can be difficult to enforce, and fuel producers could eventually reduce output if they can no longer profit from exports.

“The economic effects could be large, and I think we probably wouldn’t know the full size of the effects until we’re on the other side of this, essentially,” he says.

Seth Meyer with MU’s Food and Ag Policy Research Institute said he’s more concerned about the precedent this sets, because export controls aren’t typically how the U.S. handles commodity markets.

“I had someone ask me if we should impose wheat export controls when Russia invaded Ukraine – absolutely not! And so, I think the point is this begets a behavior that maybe becomes appealing, but fraught with lingering effects.”

Trump says the administration is considering whether restricting diesel exports could help ease domestic fuel prices. AAA says the national average price of diesel is about $6.53 per gallon, nearly $1 more than it was last month.

Inputs were a big part of the discussion at the Ag Outlook Forum. The event is sponsored by the Agricultural Business Council of Kansas City and Agri-Pulse.