LUBBOCK, Texas (RFD NEWS) — Rising activity in the oil and gas sector is signaling renewed pressure on farm input costs, as higher energy prices and production expenses begin to work their way back into diesel, fertilizer, and chemical markets.
New data from the Dallas Federal Reserve shows energy activity expanded in the first quarter of 2026, with its business activity index turning sharply positive. At the same time, input and development costs increased, reflecting a more expensive operating environment for energy producers.
That matters on the farm because fuel and fertilizer costs are closely tied to energy markets. Diesel prices have already moved higher, and fertilizer production — especially nitrogen — remains sensitive to natural gas costs.
Oil price expectations near $74 per barrel suggest energy costs are unlikely to retreat significantly in the near term, even as production levels remain mostly flat. Elevated uncertainty in the sector also points to continued volatility.
For producers, the shift reinforces the need to closely monitor input costs as 2026 budgets take shape.
Farm-Level Takeaway: Higher energy activity likely keeps fuel and fertilizer costs elevated.
Tony St. James, RFD NEWS Markets Specialist
Benchmark machinery costs against those of similar-sized, high-performing operations to inform equipment and investment decisions.
December 25, 2025 12:00 PM
·
Record pace corn exports are helping stabilize prices despite softer global grain production and ongoing supply competition.
December 25, 2025 06:00 AM
·
Rep. Randy Feenstra, R-IA, details how the “One, Big, Beautiful Bill” Act (OBBBA) supports farmers, biofuels, and rural communities with tax breaks, crop insurance relief, and ag infrastructure.
December 23, 2025 02:01 PM
·
More than 1,100 residents and farmers have signed a letter urging Ag Secretary Brooke Rollins to step in, saying the proposal threatens irrigation supplies and long-term farm viability in the region.
December 23, 2025 11:37 AM
·
Producers across the country balanced winter weather disruptions, shifting export demand, and tightening margins as year-end decisions come into focus.
December 22, 2025 03:50 PM
·
Reviewing risk management now can help dairy and livestock producers enter 2026 with clearer margins and fewer surprises.
December 22, 2025 03:19 PM
·
