WASHINGTON, D.C. (RFD-TV) — A number of farms could spend tens of thousands of extra dollars on fuel this year as federal efforts get underway to address limited diesel supplies.
President Trump says he has struck a deal with Russian President Vladimir Putin to import more than 300,000 tons of diesel to North America right away. An additional 500,000 tons are expected to follow next month, with more coming after that.
At the same time, Kansas State University agricultural economist Greg Ibendahl warns diesel supplies are limited not just in the U.S., but around the world.
“We have a world problem of lack of supply of diesel right now, and that’s the reason why prices are so high. For a number of years now, we’ve been really kind of constrained with capacity here in the U.S. It would be great if we could get a couple more refineries built, which will never happen with all the hurdles you have to jump through to get one done. We’ve had that issue going on for a while. This spring, then we suddenly add up the whole Strait of Hormuz, trying to get diesel through that way. To me, I think the big thing really probably is the whole Russian-Ukraine war.”
While many in the agriculture community are hoping for a quick fix, Ibendahl says that is growing increasingly unlikely.
“It would probably take a good year before things would finally wind back down to where they were pre, like in February-type situations. That would be the best solution. If none of those things happen, six-dollar diesel fuel—that could be the name of the game from here on out.”
Agriculture analysts warn that while higher fuel bills will hurt this harvest season, fertilizer prices could be a shock come spring.
