ANKENY, IOWA (RFD NEWS) — Record-high diesel prices are still on the rise — creating another challenge for farmers as the fall harvest and grain shipping season ramp up.
Diesel prices are adding pressure to fall farm expenses as harvest activity expands, with the national average nearly $6 per gallon and more than $2 above last year.
The Energy Information Administration says on-highway diesel averaged $5.967 per gallon September 7, up 36.8 cents from the previous week. Diesel was $2.201 per gallon higher than the comparable week in 2025.
West Texas Intermediate crude reached $92.69 per barrel on September 4, up $8.12 for the week and $30.47 from a year earlier. New York Harbor ultra-low sulfur diesel reached $4.549 per gallon.
The increase comes as farmers enter a fuel-intensive period involving combines, tractors, grain trucks, irrigation equipment, and input transportation. Higher diesel prices can quickly raise harvest, drying, hauling, and livestock transportation expenses.
Distillate inventories increased 2.1 million barrels to 106.3 million but remained 13% below the five-year average. Four-week distillate demand was also 2.6% below last year, leaving producers balancing weaker consumption against tight inventories and elevated crude prices.
Fuel Costs Can Cut Into the Farm Bottom Line
Mike Steenhoek with the Soy Transportation Coalition joined us on Tuesday’s Market Day Report to discuss how higher fuel costs work their way through the agricultural economy and ultimately affect farmers.
In his interview with RFD News, Steenhoek said rising transportation costs tied to fuel raise an important question about who ultimately absorbs them.
That could include an international importer of U.S. soybeans, the shipper or exporter, or the farmers who provide soybeans and other grain to elevators and processors.
Steenhoek said those costs are disproportionately passed back to farmers through lower prices per bushel or a more negative basis.
“This is just another way for high fuel prices to work their way into the equation and be another leak in the profitability bucket, if you will, for farmers,” Steenhoek said.
Farmers already face higher fuel costs for on-farm machinery and semis used to transport crops to market. Transportation fuel surcharges add another layer of expense.
“These costs are disproportionately passed on to farmers, so it’s not just the exporters problem, the grain handlers problem,” Steenhoek said. “These fuel surcharges that we see, it’s the farmers’ problem as well.”
Competitive Markets Pressure Farmers at Harvest
Steenhoek said shippers don’t always absorb transportation costs or pass them directly to customers because agricultural commodities trade in a competitive market.
If exporters tried to pass higher costs to international customers, those customers could look to other sources, such as Brazil, for soybeans.
“Not always, not 100%, but most of those costs are passed on to the farmers in the form of a more negative basis,” Steenhoek said.
That means higher fuel costs can ultimately reduce what farmers receive when they sell their crops.
Timing Adds to Harvest Pressure
The timing of higher diesel prices is another concern as farmers head into harvest. Steenhoek said farmers cannot simply delay harvest because fuel prices are high.
“When harvest is ready, it’s go time,” he said. “They have to get out in the field, need to harvest that crop and then they need to transport that crop.”
The machinery used during harvest and the semis used to move crops to market rely on diesel, making fuel a cost farmers have to absorb.
“We obviously hope for some relief in the future,” Steenhoek said.
Farmers Facing Higher Costs Despite Stronger Prices
Steenhoek said farmers are receiving more for their commodities following a rally in commodity prices and positive demand signals for soybeans and agriculture more broadly.
However, higher expenses are offsetting some of those gains.
“Farmers are getting paid more, but they’re actually also paying more,” Steenhoek said. “And that’s overcoming a lot of what they’re receiving.”
Steenhoek said there are no easy solutions to the fuel-cost pressure and that greater stability and predictability would help the agricultural economy.
“Being able to get to some degree of stability and reliability with our markets and geopolitical issues, that’s it’s hard to thrive as an industry,” Steenhoek said.
He said the industry needs more predictability, reliability, and stability across the agricultural economy.
