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Executive order aims to lower fuel costs for farmers, ranchers

President Donald Trump is taking steps that he says could lower fuel costs for America’s farmers and ranchers.

Speaking at a rally in Grand Island, Nebraska, Monday night, he said, “I’m going to sign a historical executive order to officially wave the off-road requirement and allow anyone to purchase tax free, red-dyed diesel for any reason.”

The White House says the move would excise taxes imposed for the remainder of the year without interest or penalties and explore pathways to eliminate the requirement to pay the deferred taxes. The order asks the USDA to encourage states to make similar changes.

Southwest Nebraska farmer Jan TenBensel says it’s not a silver-bullet, but, “Hopefully we’ll be able to miss a spike and save a $1 to $1.50 a gallon depending on where you purchased your dyed-diesel or what time frame you did.”

Ag economist Gregg Ibendahl with K-State University says the measure may not have a major impact for farmers. “The vast majority of their diesel fuel is already untaxed. I really think the benefit for farmers is going to be minimal.”

He tells Brownfield livestock producers may see some savings since the industry’s transportation costs have skyrocketed. “They’re certainly not running all of the other farm equipment like grain producers are doing. From a perspective who will benefit the most, it would be the beef producers who will be better off.”

Several states have already moved to suspend taxes on non, red-dyed diesel.

TenBensel says there is some concern how the different patchwork of regulations will impact intrastate commerce. “If you’re going to cross state lines to make sure you understand the rules in that jurisdiction. If you’re going to Kansas, make sure you understand Kansas carrier enforcement and revenue prior to running red diesel.”

He says farmers should check with state regulations to avoid fines and penalties.