Energy Costs Squeeze Rural Businesses Hiring and Expansion

Higher energy costs ripple through local farm supply chains.

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FarmHER, Inc.

NASHVILLE, Tenn. (RFD NEWS) — Energy expenses are increasingly shaping hiring and growth decisions for small businesses — especially those serving farm and rural economies — according to a new survey from the National Federation of Independent Business.

About 80 percent of small business owners report that energy costs significantly affect operations. Electricity remains the most common source, and also the most problematic, with owners saying rising bills are forcing difficult tradeoffs. The most frequent responses have been accepting lower profits, raising prices, limiting expansion, and hiring capacity.

Heating and cooling costs ranked as the top expense, followed by equipment operation and vehicle fuel — all critical inputs for grain elevators, repair shops, feed suppliers, and rural service providers. Only a small share of businesses avoided increases, mostly by reducing usage or improving efficiency.

Reliability is another concern. Two-thirds of businesses experienced a power outage in the past year, most of which were tied to equipment failure rather than storms, creating operational risks for temperature-controlled storage and processing facilities.

Fuel costs also influence fleet decisions. Many businesses now adjust delivery routes, reduce trips, or maintain vehicles more aggressively to manage expenses.

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Tony St. James joined the RFD-TV talent team in August 2024, bringing a wealth of experience and a fresh perspective to RFD-TV and Rural Radio Channel 147 Sirius XM. In addition to his role as Market Specialist (collaborating with Scott “The Cow Guy” Shellady to provide radio and TV audiences with the latest updates on ag commodity markets), he hosts “Rural America Live” and serves as talent for trade shows.

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