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Soaring diesel costs squeezing farm margins this fall

Farmers across the Midwest share one major concern as harvest gets underway.

“Diesel prices.”

West-central Indiana farmer Kevin Cox says $6 diesel takes a quick toll on a producer’s bottom line.

“To keep the machines running and to keep all the semis on the road, you’re 500 to 1,000 gallons per day,” Cox said. “It’s really, really challenging trying to keep the operation in the black.”

Central Missouri farmer Jordan Bredehoeft says he has his diesel supplies secured for the fall, but…

“We can’t hold a whole bunch,” Bredehoeft said. “We’ve got what we need for harvest here, but then after that we need to start think about locking in.”

Northeast Nebraska farmer Greg Anderson says he’s using biodiesel, which is a cheaper alternative and also supports the soybean industry.

“The biodiesel did not flow through the Strait of Hormuz. It did not come from a foreign country. It came from right here. The way to expand that is to keep on using biodiesel in many applications.”

Southeast Missouri farmer Aaron Porter says he’s in a wait and see mode.

“It’s kind of hard to tell what’s going to happen,” Porter said. “If we get the Iran deal figured out, and if Ukraine would stop bombing Russian oil, then we would probably be in a little better shape.”

Bryan Whaley operates Whaley Cattle in Eagle Grove, Iowa, and is the CEO of the Iowa Cattlemen’s Association. He tells Brownfield diesel costs have also put significant pressure on cattle producers.

“That’s going to be a challenge going into this fall, depending upon if you’ve over-contracted that or if they’re having to get it at whatever today’s price is,” Whaley said. “This is a marginal business, and our margins were already tight. You add some of those additional inputs on and that’s going to make it that much tougher to be a little bit more profitable.”

According to AAA, the national average price of diesel reached $6.44 per gallon on Friday – up from $3.70 per gallon this time last year.