GRAIN VALLEY, MO. (RFD NEWS) — Diesel prices have reached record highs as the fall harvest and grain shipping season ramps up, putting additional pressure on farmers and the trucking industry.
As of Monday morning, diesel is holding at $6.23 a gallon, with no signs of a slowdown as farmers head into harvest. The national average reached a record $6.23 per gallon on September 14, according to current market data.
That puts diesel about 80 cents above what farmers paid at this time last month.
The previous all-time high was set in June 2022, when diesel reached $5.81 a gallon. The current price has now moved well beyond that record.
This latest round of increases comes amid growing tensions between Ukraine and Russia.
President Trump has asked Ukraine’s president to stop strikes on Russia’s diesel infrastructure, saying those strikes are causing global shortages and forcing the U.S. to send supplies elsewhere.
This month marks the first time diesel has climbed past $6 a gallon.
Fuel Costs Ripple Through the Supply Chain
Andrew King with the Owner-Operator Independent Drivers Association (OOIDA) joined us on Monday’s Market Day Report to discuss the impact of rising diesel prices on truckers, farmers and the broader supply chain.
In his interview with RFD News, King said the timing of the diesel price increase is particularly difficult for the trucking industry.
“We just are coming off a record-long freight recession, basically 40-plus months from Q2 2022 up until the tail end of 2025,” King said.
He said the industry was beginning to enter a new upcycle before facing additional cost pressure from higher diesel prices.
“And then to have this extreme cost pressure is very disappointing and more than likely could shorten our up-cycle that we were hoping we would be seeing long into the future,” he said.
King said drivers cannot absorb much of the additional fuel cost themselves, and not all drivers have access to fuel surcharges that can help offset higher diesel prices.
“Unfortunately, not too much, and not everyone is able to get a fuel surcharge in order to make up for that cost,” King said. “And even when they do, it doesn’t always compensate for everything.”
Owner-operators make up a large part of the trucking industry but do not always have the same opportunities as larger carriers to offset higher fuel costs.
King said trucking is heavily used across construction, agriculture, and manufacturing.
“They all use trucking as an input to transport their goods or even bring goods to their facility to further process,” he said. “So, it really has an outside effect.”
Lag Between Diesel Prices and Transportation Rates
King said there is a lag between pump prices and what shippers pay for transportation.
He said contract periods have become shorter, meaning fuel surcharges may appear more quickly than they traditionally did.
“They used to be six months to a year on a contract basis, and now it’s much shorter,” King said. “So you might see those fuel surcharges popping up a bit quicker than what was traditionally done, but they’re definitely feeling it.”
King said current freight rates are helping drivers absorb some of the higher costs, but he does not believe those rates are sustainable at current diesel price levels.
Higher Prices Could Push Some Drivers Out
King said the trucking industry is nearing a point where high diesel prices could become economically unsustainable for some drivers.
He said higher freight rates over the last few months have helped keep some operators afloat, but that may not continue if diesel prices remain elevated.
“I would imagine by the time, by the end of this year into the beginning of Q1, Q2 2027, it’s going to get really, really hard for a lot of folks, and I would expect to see a lot of people unfortunately go out of business,” King said.
Some independent drivers are changing how they operate in response to higher costs.
“Some will even shut down their truck, to be honest,” King said.
Others with their own authority may lease on to a larger carrier to protect themselves against costs they can’t absorb on their own.
Diesel Prices Could Put More Pressure on Goods
King said diesel prices could become even more extreme as refinery maintenance approaches and inventories remain under pressure.
“Refineries are running at 98% utilization and yet inventories aren’t building up, which is what they normally do this time of year,” he said.
King also pointed to diesel and oil exports and upcoming routine refinery maintenance as factors that could tighten the market.
“So things are going to get tighter,” King said. “I would expect diesel prices to get even more extreme, which is hard to believe right now.”
He said higher transportation costs eventually reach the prices consumers pay for goods.
“It usually takes about three to six months, nine months, depending on the product, to see those prices really show up in the final end,” King said.
King said higher costs could have far-reaching impacts on both trucking and farming.
Fuel Costs Strain Farm Budgets Ahead of Harvest
With harvest approaching, higher fuel costs could add another layer of pressure to farm budgets. Input costs like diesel have burdened most operations this year.
Economists out of Illinois say rising commodity prices can help soften the blow.
University of Illinois economist Nick Paulson says farmers have some positive opportunities on the revenue side.
“Maybe a good news takeaway is on the revenue side, we’re seeing pricing opportunities now for the 2026 crop and looking ahead to 2027 that are higher than what we were looking at in our May release and higher than what we’ve seen since the 2023 crop year, looking at close to a $5 price for the 2026 crop and a $5 price on corn for 2027. Beans, at or above $12 per bushel for both ’26 and ’27, again considerably higher than what we’ve had in the last three crop years.”
While most of these input price spikes are well outside a farmer’s control, Paulson says producers can do a few things to lower costs.
“There’s typically some room there to lower those application rates. The other thing we’ve been saying is to make sure those capital purchases you make, whether that’s machinery or land, are evaluated correctly. We’ve seen a significant increase in machinery costs in the last three to four years. Carefully making those reinvestment decisions and doing that when it’s needed is another thing that can save a few dollars per acre.”
Input price gains did not happen overnight.
Paulson says this trend has been forming for 25 years, while return rates have not seen comparable growth.
Rising Input Costs Top of Mind
One USDA official spent some time in farm country recently and says costs are top of mind for everyone he met.
USDA Undersecretary for Trade Richard Fordyce says producers across multiple sectors are dealing with higher costs.
“At every stop they were talking about cost of production, whether that was on a dairy farm, whether that was on a crop farm, whether that was at Organic Valley,” Fordyce said. “No matter what segment in agriculture you’re in right now, everything just costs more. The row crop farm that we’d stopped at talked about machinery costs and what it costs to stay current with technology and seed costs and chemistry costs and certainly fertilizer costs. That’s not news, but it’s certainly something that agriculture is dealing with on a daily basis.”
Fordyce told the crowd the administration remains focused on boosting fertilizer availability for growers, mainly through onshoring production.
High Fertilizer Prices Also a Major Concern
While diesel is a major cost for producers right now, fertilizer prices have also been weighing on farm budgets.
Lawmakers in Florida now say they are worried about phosphate supplies moving forward. They are asking the Trump administration to address a sharp rise in sulfur prices, a key input for phosphate fertilizer.
They say sulfur that once sold for about $172 per ton is now going for as much as $1,100. Florida lawmakers recently cited sulfur prices above $1,100 per metric ton, up from a previous average of about $172 per long ton.
Global supplies have tightened because of geopolitical and shipping disruptions.
Lawmakers warn a prolonged shortage could mean higher fertilizer costs and more reliance on foreign supplies.
