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Diesel costs raise concerns ahead of 2027 loan renewals

An ag lender says adjusting cash flow projections could help eliminate some margin uncertainty for 2027.  

Barry Benson with First National Bank of Omaha says skyrocketing diesel prices continue to be the top concern for many of his customers. “We had diesel at $4 or $3.50 or even lower at the time. We need to go back and run the numbers for ’27 and say ok what would my breakeven be with higher prices? With fertilizer the way that it is, do I need to lock in a little bit today just because I don’t know what it’s going to be to better protect myself?”

He tells Brownfield, so far, producers haven’t raided the size of their operating loans. “We’re at prices for breakeven or even above for a number of producers. That’s been able to offset some of the fear or the unknowns as far as diesel goes.”

Northeast Kansas farmer Brett Kneibling says the current cost environment makes it difficult to plan ahead. “You start seeing what these input costs are going to be and take two steps back.”  

He says he could have less cash on hand heading into next year. “We’ve been forward pricing our diesel throughout the year. We have yet to bet hit by these higher prices. We’re not going to get away from it. We’re going to run out of our earlier purchased diesel and go get some of this higher stuff.”

Benson and Kneibling say it’s critical to keep in constant communication with lenders as loan renewal season approaches to ensure producers are well-positioned financially.