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NGFA CEO says rising diesel prices increasing grain transportation costs across industries

The CEO of the National Grain and Feed Association says the conflict in Iran is impacting transportation costs throughout the supply chain. 

Mike Seyfert says higher diesel prices are impacting how grain moves to market.

“We’re seeing premiums on vessels of about a million and a half dollars or 50 cents a bushel,” he says. “For trucking, every dollar increase in diesel is about $20 per 100 mile trip or about two cents a bushel. On the rail side, a lot of those surcharges may not begin to kick in til May.”

According to AAA, diesel prices have risen more than 30 percent since the start of the conflict in Iran.

Frayne Olson with North Dakota State University says it’s also adding another layer of uncertainty for local grain elevators.

“They’re making assumptions about what the cost of transportation is going to be from their local facility to that export facility,” he says. “Changes in the fuel service charge can actually eliminate any kind of profit margin they have on the transaction.”

Seyfert says diesel prices are expected to continue to rise the longer the Strait of Hormuz is shut down.

AUDIO: Mike Seyfert, National Grain and Feed Association

AUDIO: Frayne Olson, North Dakota State University