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K-State economist sees diesel prices reaching $7 next year

A Kansas State University ag economist projects diesel prices could hit $7 in 2027.  

“Farmers are in a really, really bad situation here.”

Gregg Ibendahl says if global production and refinery issues were solved today, it would take an additional 12 months for major price improvement, and farmers are limited in their options. “It’s not their major cost of grain production, but it’s certainly an important one. You really just can’t say I’m going to cut back because we’re already doing a lot of no till or minimum till. You have to run a combine across the field. You can’t get away from doing those operations here.”

He tells Brownfield the lack of U.S. refining capacity, the ongoing conflict in the Middle East, and the Russian/Ukraine war have been contributing to higher prices. “They’ve been trading drone strokes on each other’s refineries. Russia used to be the world’s number 2 diesel exporter. Now, they’re not exporting anything because they don’t have the ability produce diesel fuel anymore. Europe has really been starving for diesel fuel.”

He says the best solution is to allow the market to act independently from government involvement.

Gregg Ibendahl: