WASHINGTON, D.C. (RFD News) — Farm leaders are calling for temporary changes to federal and state diesel rules as high fuel prices continue to pressure farm margins.
American Farm Bureau Federation President Zippy Duvall is asking the Trump administration to temporarily suspend the federal highway diesel tax for agricultural transportation. He is also seeking a temporary waiver of federal penalties for using dyed diesel on highways.
Dyed diesel is commonly used in tractors, combines and other off-road farm equipment, but its use on highways is restricted. A similar push is underway in Kentucky, where the state’s agriculture commissioner is asking for temporary highway use of dyed diesel during harvest.
President Donald Trump has also raised the idea of banning U.S. diesel exports. Kansas State University economist Gregg Ibendahl said that could provide short-term price relief, but limited storage capacity would become a problem.
“That could potentially help short-term because it would keep more supply here in the U.S. But unfortunately, we don’t have that much storage capacity, as far as tanks to put diesel fuel in either. After about seven weeks of a ban, we would run out of space to put diesel fuel. The only thing that would do is give us a temporary break in prices. Over about seven weeks, that would go away, and we would cap out. It would actually, then, mean refineries would have to stop making as much diesel fuel and gas because they wouldn’t have any place to store it here.”
AAA reported diesel at $6.37 per gallon, down from $6.50 a week ago. A year ago, diesel averaged $3.70 per gallon.
