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
Congress has just over a month of working days left for the year. Plan for uneven USDA service until funding is restored, and closely monitor Farm Bill talks, as avoiding Permanent Law before January 1 is the single biggest risk to markets and milk prices.
October 07, 2025 11:09 AM
·
Despite tariffs having a less significant impact on exports, corn producers struggle with tariff-related increases on inputs, which complicates their bottom line.
October 06, 2025 01:13 PM
·
Jack Daniel’s will end its Cow Feeder Program, which served around 100 livestock operations near the distillery, and redirect spent grains to its anaerobic digester.
October 06, 2025 12:33 PM
·
Prepare for acute UAN risk and a brief urea shock; maintain steady ammonia and phosphate plans, and monitor potash basis on the coasts.
October 06, 2025 11:56 AM
·
Dave Kestel, a farmer from Will County and member of the Illinois Farm Bureau, joins us to share a boots-on-the-ground update on the 2025 corn harvest.
October 03, 2025 02:30 PM
·
American Coalition for Ethanol’s Ron Lamberty shares the significance of California’s approval, opening up the country’s largest gasoline market to a cleaner-burning, often lower-cost fuel option.
October 03, 2025 01:12 PM
·
