Fuel

Financial Strain & D.C. Disconnect: Shaping the Rural Vote

Sat, 16 May 2026 10:33:00 GMT

Frustrations over the skyrocketing costs of doing business, trade policies and lack of E15 expansion have put producers’ votes – many in competitive political battleground states – in play, according to an exclusive poll of Farm Journal readers.

The poll, which surveyed producers through April and was commissioned by the agriculture-focused public affairs firm Amato Advisors, shows the following:

Four in 10 producers are currently undecided or considering voting for a different party.
Half of those surveyed report fair to poor finances. Twenty-five percent fear they will restructure or leave farming or ranching entirely.
Rising input costs are listed as the top challenge; of those listing tariffs at the top, almost 90% have a negative view.
Year-round E15 approval is a decisive voting factor for nearly half of all producers.
The biggest frustrations that can move voters vary by state. In Iowa, it’s E15 and trade, but in Wisconsin, it’s healthcare and input costs.

Researchers, lobbyists and analysts who reviewed the poll for Farm Journal stress this is not a realignment toward Democrats. Rural America remains Republicans’ home turf.

Instead, producers increasingly think neither party knows nor cares to understand them, let alone solve their problems, according to the findings. If a candidate from either party can prove they are serious about farm-country issues that could be enough to win votes and change the course of up-for-grabs midterm elections.

“The frustration is not simply with ‘government,’” says Nicholas Jacobs with the Bram Public Policy Lab at Colby College , who reviewed the poll’s findings. “It is with a government that is too removed from the consequences it creates and poorly aligned with the realities of rural economies. When people feel squeezed while also believing elected officials do not understand their lives, that creates real political vulnerability heading into a midterm election.”

Amato Advisors ’ founder Mike Amato , who served in senior positions in the Biden-Harris and Obama-Biden administrations, says the findings apply to both parties.

“[The results show] a strong signal of disconnect between what is happening on the land and what is happening in D.C.,” Amato explains.

This Farmer & Rancher Policy Sentiment Survey polled farmers and ranchers from April 2 to April 24. A total of 974 producers from 44 states responded. About one-third live in “swing districts” with competitive elections in November, including areas in Iowa, Wisconsin, Nebraska, Michigan and Ohio. Amato Advisors details more of the data here .

The findings come at a crucial moment for agriculture and the political direction of the country.

Year-round E15 stands front and center. Producers and retailers consider E15 expansion as the single fastest way to generate real, immediate demand for corn and reduce reliance on government support. Resentment reached a boiling point when legislators continued to delay a vote .

On Wednesday, Congress passed a bill by 15 votes that would allow nationwide year‑round sales of gasoline containing 15% ethanol. It now faces a tough battle for passage in the U.S. Senate .

In the meantime, Republicans have been losing what were comfortably safe districts, including some with agricultural voters. For example, Democrats flipped two Iowa state Senate seats in 2025 special elections (Iowa’s 1st and 35th Senate districts).

Anecdotally, producers have shared their frustrations over policies during the second Trump administration. But this Farm Journal-Amato Advisors survey is among the first to try and measure whether any of those changes will result in changes at the ballot box.

Status Quo or Shakeup? What Moves the Rural Voter

According to the poll, 61% of producers say they plan to vote for the same party as usual. However, nearly 1 in 5 say they aren’t sure yet, and 17% are actively considering either a different party or an independent/third-party candidate.

“That leaves a lot of rural America potentially up for grabs,” says Jessica Schulken , a lobbyist with the Russell Group based in Washington, D.C., who viewed the results of the poll.

Jacobs looks at it as roughly 40% of respondents express either uncertainty, openness to independents or willingness to consider another option.

“That does not mean Democrats are suddenly competitive everywhere,” he says. “It does mean this block of rural voters – who tend to be even more conservative than their neighbors – are feeling downright frustrated with the status quo.”

Noting that machinery costs, input prices, trade policy and tariffs are pinching margins for producers, Callie Eideberg , a principal with Washington lobbyist the Vogel Group , says these issues are also policy choices made by the administration.

“The administration was not forced to take action on trade and input costs, and these policy choices can be reversed or muted at any time,” she says. “If you assume respondents understand the president chose to implement policies increasing machinery costs and dismantling trade agreements, then their reporting that 61% will still vote for the same party in November implies they are also choosing to keep those policies in place.”

Rural ag voters don’t hold much confidence in the current slate of elected officials to grasp their situation. Nearly three-quarters say office holders don’t understand the realities farmers face.

So how does that translate to the rural vote?

23% say nothing would change their vote. “Until Democrats stop showing up in an election year in rural areas and then disappearing again, nothing will change my Republican vote. Words don’t help, action does.” — says a Congressional respondent
26% say candidate quality is the primary determinant. “ … I am open to voting for a solid candidate, regardless of party, which brings a strong knowledge and positive position to the table for the rural landscape and production agriculture in particular.” — says a Congressional respondent
51% name specific conditions or issues that could move them. “High input costs, tariffs causing market volatility, loss of health insurance, frustration with SNAP changes, high interest rates, high fuel prices and global conflicts coinciding with planting and harvest.” — says a Congressional respondent

“Partisanship in rural America has become increasingly layered on top of older frustrations that predate any single administration or price fluctuation,” Jacobs says. “For many rural voters, dissatisfaction with economic conditions does not automatically translate into openness to Democrats because the Democratic brand itself remains deeply unpopular.”

He says it would be similar to asking why urbanites didn’t revolt against Democrats when housing prices shot up or when schools keep failing.

The Split: Row Crop Strain vs. Livestock Optimism

When farmers were asked to describe the overall financial condition of their farming operation over the past 12 months, about half say they’re in good to excellent shape. More than 1 in 10 consider their economic condition poor or very poor.

“The farm economy at 50/50 shows the split between livestock profitability versus row crops,” adds Tyson Redpath , chairman of advocacy and business strategy for the Russell Group.

Eideberg looks at it another way.

“Just 43% of respondents reported their farm’s financial condition was ‘good’ and 38% reported ‘fair’ financial conditions,” she says. “This stands in opposition to the repeated proclamations from this administration that the ag economy is turning around.”

Rising Input Costs and Trade Policy: Farmers Rank Top Challenges

In the poll, participants were asked to identify the three biggest challenges currently facing their operation. Machinery and input costs top the list at more than 78%. Another 44.3% say it’s commodity price volatility, and another quarter say either weather or trade policy and tariffs.

When it comes to farmers who would consider changing their vote, one congressional respondent says: “I’m fed up with the U.S. financing other countries when our farmers are going bankrupt. Our politicians need to do their job on a bipartisan level!!!”

Of those citing tariffs and trade, nearly 88% say the policy is either somewhat or very negative, and 65.5% say tariffs will hurt long term.

When asked to describe the overall effect of federal government policies on their farming operation over the past year, 54.6% of nationwide respondents describe the effect as moderately or significantly negative. Just under 1 in 5 describe the effect as positive to any degree.

Why Input Costs and Trade Lead Farmer Concerns

As producers look past this vote and to the next presidential election, respondents ranked nine policy areas in order of priority for the current administration. Regardless of whether respondents are in targeted swing districts or the broader nationwide sample, input costs rank first by a wide margin, followed by trade policy and export markets. Conservation programs come in at the bottom of the priority list.

“If you look at the top issues identified by producers, input costs and trade policy, there’s not a whole lot that can be done about either one of those that will directly impact the farmers’ bottom line before the elections,” Redpath says.

Based on his analysis of the survey results, Jacobs says farmers and ranchers are searching for stable rules and better prices.

“I think both parties should pay attention to the fact that these concerns are overwhelmingly operational rather than ideological,” Jacobs says. “Rural voters are not saying the government should disappear, but rather that it needs to get its act together.

Year-Round E15 and Competition: Critical Factors for Rural Voters

The tariff and trade debate is all about finding and developing new markets for U.S. ag goods as global competitors erode a once dominant position. There’s been no bigger “new market” debate than year-round E15.

When asked how important year-round E15 approval was as a voting issue, 45.5% of nationwide respondents say it is very or extremely important — making it a direct candidate selection factor for nearly half the sample. Another 28.2% say it is somewhat important.

The poll results show E15 is one of the few issues in the survey where support for a specific policy is explicitly tied to electoral behavior rather than just expressed as a preference. Voters in key swing states and districts rate E15 as a voting issue at a slightly higher clip, which appears to reflect the higher concentration of corn and ethanol-producing states in the sample.

While trade and export markets continue to rank high, respondents are also focusing on competition abroad. More than 85% say they are very or somewhat concerned about global agriculture competition from producers in Brazil, Argentina and the European Union. The poll shows this is one of the highest rates of agreement on any issue in the survey.

How Ag Priorities Vary Across the Rural Vote

According to this poll, not all swing states are focusing on the same issues. For example:

Iowa. The most swing-available state in the sample with the highest E15 mobilization.
Wisconsin. The most financially distressed state — and the only one where Democrats are genuinely competitive on healthcare.
Nebraska. The most economically conservative electorate — but with the highest E15 intensity and notable tax concerns.
Ohio. A distinct issue mix – commodity prices and weather dominate, not input costs or tariffs.
Michigan. The highest vote motivation and switch potential in the survey — Democrats lead on farm labor.

“People do not experience politics as detached issue-by-issue calculators,” Jacobs says. “That does not make economic concerns irrelevant – and they are clearly not in this poll – but it does mean that dissatisfaction alone is often insufficient to fully reorder political loyalties.”

As Nov. 3 approaches, Amato describes midterm elections as an accountability checkpoint – a referendum on whether political actions match campaign words.

“Polls like this, combined with additional advocacy and farmers using their voices to talk to elected officials, can help close the gap so federal policy actually meets farmers where they are,” he says. “I hope this poll sends a signal to everyone who’s in elected office, or who wants to be an elected official, to take into consideration the challenges producers are facing today.”

Diesel Prices Are Breaking Records Across Multiple States, And Relief May Not Come in 2026

Wed, 06 May 2026 12:53:39 GMT

On Tuesday, President Trump stated that high gasoline prices are a “very small price to pay” for the ongoing war with Iran, arguing they are necessary to prevent Iran from obtaining a nuclear weapon. He predicted prices will “come crashing down” once the war ends. But for farmers and ranchers, diesel prices have risen more than gas, putting a further strain on already high input costs for 2026.

Trump on Oil Prices:

I looked today, it's like at 102 and that's a very small price to pay pic.twitter.com/2V8LC93wFj
— Acyn (@Acyn) May 5, 2026

To start the week, diesel prices went on another run with the national average diesel price is just 20 cents away from reaching a new all-time high. And across the country, a growing number of states aren’t waiting to get there. About six states are already seeing the national average price of diesel reach record highs.

From the Great Lakes to the West Coast, roughly a half dozen states have already smashed previous records, as a late-April dip in prices quickly faded and a fresh surge took hold.

“Diesel now averaging about $5.65 a gallon nationally. That is only about 20 cents away from a new all-time record high,” says Patrick De Haan, head of petroleum analysis at GasBuddy . “So even though we had that short-lived break, we’re right back knocking on the door of records again.”

That “break” didn’t last long. De Haan says even though diesel prices saw a bit of a respite for April, with even prices starting to trend down in mid-April, those prices re-accelerated in the last week.

New records for diesel in:
Michigan, $6.01
Illinois, $6.01
Wisconsin $5.67
(Indiana 0.2c/gal away), $6.03
(Ohio ~19c/gal away), $5.93 https://t.co/DV0387vvMR
— Patrick De Haan (@GasBuddyGuy) May 5, 2026

Now, the rally is showing up in state-by-state records, especially in the Midwest.

“Looking at it state by state, Great Lakes states have seen some tremendous refining issues that have really caused prices to rise dramatically,” he says. “Michigan has now set a new all-time record high for diesel over $6. Indiana is just a few tenths of a penny away from setting a new all-time record. Illinois has set a new all-time record. Wisconsin has set a new all-time record.”

And it’s not just a regional story. States in the West were some of the first to not just see the highest prices, but now also hit record levels.

“Out on the West Coast, Arizona set a record a couple of weeks ago, and Washington state is at an all-time record,” he adds. “So there are probably about a half dozen or so states that have set new all-time records, and again, the national average itself is just 20 cents away.”

Perhaps the most telling shift, though, is there’s no longer a low-price refuge.

“No states any longer have diesel averaging below $5 a gallon,” De Haan says. “Texas was the last holdout, and it now is above $5 per gallon. So across the board, $5 diesel is now essentially the floor, and in some areas, that’s actually the cheaper end of the spectrum.”

At the high end, prices are reaching extremes with California’s average diesel price now surpassing $8 per gallon.

Global Tensions Cloud Relief Outlook

With prices continuing to climb, farmers are looking for relief. What would it take to reverse course? That answer remains tied to global uncertainty.

“Relief may be a little bit elusive,” De Haan admits. “It really just depends on the daily developments in the situation between the U.S. and Iran—whether the Strait is open or not, or whether we’re in phases of escalation.”

The Strait of Hormuz remains a critical chokepoint for global energy supply, moving roughly 20 million barrels of oil per day.

“Nothing else matters to the oil market more than this waterway,” he emphasizes. “We’ve seen attacks that have pushed oil prices higher, which in turn pushes diesel wholesale prices up. You may get a little bit of day-to-day relief, but there really is no ‘coast is clear’ until there’s some sort of definitive resolution.”

And even then, he says a turnaround won’t happen overnight.

“If there is a definitive signal to the market, if the Strait reopens and both sides are aligned, prices could start falling within 48 hours,” De Haan explained. “But the rate of decline is likely to slow after that initial drop.”

Prices Likely to Remain Elevated Through 2026

Not only is the rate of decline projected to be slow, but De Haan says diesel prices aren’t likely to drop back to pre-war levels by the end of the year.

“Roughly half of the increase we’ve seen over the last couple of months could come down within the first few months of positive news,” he said. “But the other half could take many more months. We may not get back to pre-conflict diesel prices until late this year—or even into 2027.”

For agriculture, that prolonged stretch of elevated prices carries real consequences.

“When you look at what comes out of a barrel of oil, diesel only makes up about 25%,” De Haan explained. “Gasoline is a larger portion, so it’s been less impacted. Jet fuel, which is an even smaller share, has been hit the hardest. So it’s almost inverse to how much is produced.”

Why Diesel Is Climbing Faster Than Gasoline

If it feels like diesel prices are rising faster and hitting harder than gasoline, there’s a reason rooted in how a barrel of oil gets used.

“Diesel has seen more of the sticker shock compared to gasoline,” says De Haan. “And a lot of that comes down to what comes out of a barrel of oil.”

Not all fuels are created equally in supply. Gasoline makes up the largest share of a refined barrel, while diesel represents a smaller slice, making it more vulnerable when supply is disrupted.

“Gasoline is the top product flowing out of a barrel of oil, so it’s been the least impacted,” De Haan explains. “Diesel, on the other hand, only accounts for about 25% of a barrel, so it’s been more impacted when there are supply issues.”

That imbalance becomes even clearer when looking across the full spectrum of refined fuels.

“The most significant impact has actually been to jet fuel, which is only about 9% of a barrel,” he adds. “So if you look at it inversely—the smaller the share of the barrel, the bigger the impact we’re seeing right now.”

For agriculture, that dynamic matters more than most sectors.

Diesel isn’t optional on the farm. It’s essential. From planting to harvest, it powers tractors, trucks and the supply chain that moves commodities across the country.

“Diesel is the fuel that drives agriculture,” De Haan say. “And that’s why these price increases are so impactful, not just at the pump, but all the way through the economy.”

And while prices are already elevated, the full effect is still working its way downstream.

“Consumers really haven’t even seen the full onset of some of these higher prices yet,” he adds. “That’s going to continue to trickle through in the weeks ahead.”

Demand Holding...for Now

Even with these high prices, so far, demand hasn’t shown many signs of slowing.

“We have not seen much meaningful decrease in demand yet,” De Haan says. “We’ve seen very little, if any, diesel demand destruction so far, which tells you the economy is essentially preparing to pay these prices because it still needs the fuel.”

But there are warning signs ahead.

“If diesel nationally hits $6 a gallon, that’s likely when we start to see consumption slow,” he says. “For gasoline, that number is about $5 a gallon. We’re getting very close to those thresholds.”

Until then, the pressure continues to mount. And for farmers heading deeper into the growing season, that pressure is becoming harder to ignore.

Diesel Prices Spike on Iran Conflict Just Ahead of Planting Season

Wed, 04 Mar 2026 15:56:38 GMT

Diesel prices spiked more than 60¢ combined on Monday and Tuesday.

It is a direct result of the supply cutoff through the Strait of Hormuz, says Alex Hodes, director of market strategy – energy with StoneX Financial Inc. Refined product movement is concentrated in the Strait, making this one of the biggest global disruptions for the oil market.

“A large amount of refined products, specifically diesel and jet fuel, transport through this Strait. That closure is causing panic in buyers of Middle Eastern diesel, one of which is Europe, which is kind of the primary maker of diesel prices globally. That’s dragging on NYMEX heating oil diesel prices as well,” Hodes says.

Nationwide Diesel Prices Up Sharply from 2025

After rising 10.8¢/gal. on Monday, the national average price of diesel rose another 8.1¢ Tuesday afternoon. It reached $3.929/gal. — a rise of almost 20¢ in two days, writes Patrick DeHaan, head of petroleum analysis at GasBuddy, in a post on X.

Data from the Energy Information Administration (EIA) shows the national average diesel price on Tuesday was up 31¢/gal. from a year ago.

Meanwhile on Wednesday morning, NYMEX heating oil futures were up nearly 68¢ from Friday at $3.26/gal. Diesel prices are based on these futures.

When compared to a year ago, NYMEX heating oil prices were up over 90¢/gal. and have risen $1.21 since December 31.

(Barchart )

They Could Climb Higher

Hodes thinks there is more upside potential for diesel fuel prices.

“Yes, I think there’s still risks that are in the market and have not really come to fruition quite yet. So ultimately, with the Strait of Hormuz closure, the question will be how long will that last,” Hodes says.

Some relief may come following a Tuesday afternoon post from President Donald Trump. He ordered the U.S. Development Finance Corporation to provide political risk insurance and guarantees for the financial security of all maritime trade at a reasonable price. He added that, if necessary, the U.S. Navy would escort tankers through the Strait.

While that will help lower the insurance costs to allow oil tankers to pass through the Strait, the shipping industry sees this as only a partial solution to the historic crisis.

“One other factor is that several Middle Eastern refineries have been attacked, and that’s over 1 million barrels per day almost offline due to those attacks. So, additional Middle Eastern refineries could be at risk, and that’s another bullish factor there,” Hodes says.

Diesel Prices Rise More Than Other Energy Products

He adds diesel has risen disproportionately more than other energy products. This is partly due to tighter global inventories.

“But the biggest one is that there’s more diesel products flowing through the Strait of Hormuz than gasoline or some of the lighter counterparts,” Hodes says.

And Asian refineries, particularly in Japan and China, have also announced they could reduce run rates at their refineries if the disruption lasts.

The Price Hike Comes at Crunch Time for Farmers

The higher prices come as diesel demand ramps up for planting.

“It is a tough time to lock in fuel costs specifically, you know, in the start of March now. So, it’s not a great time to be a consumer of fuel,” Hodes says.

Unfortunately, few farmers locked in diesel prices when they hit lows in December and early January. This was just before the polar vortex rallied prices.

It is another expense they can’t afford when farmers are moving into the 2026 growing season already facing slim-to-negative profit margins.

Could EPA Decision Signal The Beginning Of The End For DEF?

Thu, 31 Jul 2025 16:26:25 GMT

Mike Berdo has strong words to describe his ongoing experiences using machinery requiring DEF ( Diesel Exhaust Fluid ) on his southeast Iowa farm.

“It has been an absolute nightmare, at least for us. Mechanics make trip after trip to do little stuff that’s very expensive to fix,” said Berdo, who produces grain and beef cattle near Washington. “We had planting delays last spring … little stuff that came from it and just seemed like [an issue to deal with] day after day.”

The ongoing mechanical issues and costs are why Berdo said he is “all for” EPA rescinding the 2009 Greenhouse Gas Endangerment Finding. The Finding has enabled the agency to regulate greenhouse gas emissions under Section 202 of the Clean Air Act and, in recent years, and launch requirements such as the use of DEF systems in diesel-powered engines.

EPA Draws A Line In The Sand
On Tuesday, EPA Administrator Lee Zeldin released a proposal to rescind the 2009 Finding.

If finalized, the proposal would remove all greenhouse gas standards for light-, medium- and heavy-duty vehicles and heavy-duty engines, EPA said in a follow-up press release .

The move would start with EPA’s first greenhouse gas standard set in 2010 for light-duty vehicles and those set in 2011 for medium-duty vehicles and heavy-duty vehicles and engines.

EPA said the proposal is expected to “save Americans $54 billion in costs annually through the repeal of all greenhouse gas standards, including the Biden EPA’s electric vehicle mandate, under conservative economic forecasts.”

Zeldin made the announcement to rescind the Finding in Indiana, alongside Energy Secretary Chris Wright, and called it the largest deregulatory action in U.S. history.

What The Decision Could Mean To Farmers
Specific to U.S. farmers, the proposal could potentially result in DEF systems no longer being included on new tractors and other heavy equipment using diesel-powered engines, said Chip Flory, host of AgriTalk, during a Farmer Forum discussion on Wednesday.

South Dakota farmer Ryan Wagner told Flory he has a wait-and-see perspective on how or whether the EPA proposal goes into effect. He anticipates that reversing the Finding will take considerable time and effort for EPA to implement.

“It took a long time with the interim engines and things to get into full DEF in the first place,” Wagner said. “I don’t know how long it would take to unwind all that and how quickly manufacturing will just take those systems right off, but it’ll be interesting to see what happens.”

To Wagner’s point, here’s a brief look back at some timing showing when DEF rolled out in agriculture and nonroad equipment and became mandatory . The regulations were phased in over several years based on the type of equipment and engine size:

2008: DEF became required for all new diesel engines with engine sizes over 750 horsepower.

2011: the regulations expanded to include equipment with engine sizes between 175-750 horsepower.

By 2015, all new nonroad diesel engines were required to be Tier 4 compliant and utilize DEF, regardless of equipment type or engine size.

As Wagner considers DEF, he noted its use in diesel engines has provided him with one benefit: “On the plus side, I do like that they don’t make the walls of my shop black. That’s been nice,” he said. “You can run them inside for a short time and not not feel like you’re breathing in a bunch of soot and making everything black.”

Expect Legal Challenges To EPA Decision
A number of environmental groups have already blasted the move by EPA, saying it spells the end of the road for U.S. action against climate change, according to an online article by Reuters .

Legal challenges from various environmental groups, states and lawyers are likely ahead.

That fact wasn’t lost on Flory and the Farmer Forum participants during the AgriTalk discussion on Wednesday.

“If this proposal is finalized, it’s going to start a lot of conversations … and the dominoes are going to start to fall, something that we need to keep track of, no doubt,” Flory said. You can hear the complete Farmer Forum discussion on AgriTalk here:

EPA will initiate a public comment period to solicit input. Further information on the public comment process and instructions for participation will be published in the Federal Register and on the EPA website .

Your next read: Right To Repair Granted? John Deere Launches Digital Self-Repair Tool for $195 Per Tractor

How To Increase Your Potential SAF Tax Credits Now

Tue, 05 Mar 2024 22:54:02 GMT

With sustainable aviation fuel (SAF) tax credits beginning in 2025, the practices farmers use during the 2024 growing season will have a direct impact on their ability to take advantage of these incentives.

Mitchell Hora of Continuum Ag recently joined the Top Producer podcast to share the best ways to begin preparing now.

“If you’re selling to a biofuel plant, the company will be asking you for management information, and they might be just directly asking you for your carbon intensity score,” Hora says.

A grower’s carbon intensity (CI) score is calculated based on a tool from the U.S. Department of Energy called the Greenhouse Gases, Regulated Emissions and Energy Use in Transportation (GREET) model. The score can vary from field to field and year to year.

According to Hora, the GREET model tells growers what their crop’s carbon footprint is. And for the corn and soybeans that will be planted this spring, the footprint is already being made.

“To maximize this opportunity in the calendar year 2025, we need to optimize the carbon intensity of the corn that we’re going to grow, and the soybeans we’re going to grow in 2024,” he says. “The practices that we did this fall, like tillage, manure, fertilizer and cover crops directly impact the carbon intensity of this 2024 crop.”

The upcoming tax credits are dependent on the crop’s CI score, and the maximum credit would be $1 per gallon for ethanol and biodiesel and $1.75 per gallon for SAF. However, Hora doesn’t advise expecting to receive that value.

“I think it’s going to be tough to get there,” he says. “If my corn has a CI score of zero, it doesn’t necessarily mean the ethanol has a score of zero because there are a lot of other factors that go into it.”

He shares on average, U.S. ethanol has a CI score of 55.5 while U.S. corn has a CI score of 29 – though he has seen scores range from 44 to -13.

How to Find and Improve Your Score
As far as how to figure a CI score, producers can download the GREET model and input their data, but Hora warns it can get complicated. He shares Continuum Ag has developed a program that simplifies the model, though there is a fee to access it.

“It plugs in your typical fertilizer, typical yield, what you do for tillage, if you use cover crops, fuel usage, etc.,” he says. “Then we run the actual GREET model and as they create updates, we’re ready for it and just plug in the new model. All of our farmers will get their updated CI score.”

Once growers receive their CI scores, they may be curious how certain practices change it. Hora lists a few of the ways producers can lower their scores, such as:
• Using a cover crop ahead of corn
• Supplementing or replacing synthetic fertilizer with manure
• Reducing tillage by implementing strip till or no till practices
• Decreasing diesel fuel usage and energy inputs
• Improving yield to spread carbon input across more bushels

He also encourages consulting with your agronomist to find the steps you need to take next.

“We cannot just sit back and wait,” Hora says. “There 6 billion bushels of corn that goes into ethanol every year in this country, and right now all 6 billion bushels have a default CI score. We need to keep having the conversation of getting more farmers aware and getting more farmers to get their CI score.”

To hear more about SAF tax credits, listen to this episode of the Top Producer podcast.

Related Stories:

Carbon’s Next Chapter On The Farm

Carbon Intensity Is Going To Be A Team Sport

Crude Awakening: Rising Oil Prices Complicate Fed's Rate-Hike Decisions

Wed, 20 Sep 2023 21:16:16 GMT

As brent crude futures soar toward $100, it’s creating a new battle in the Federal Reserve’s effort to fight inflation. One money manager warns another rate hike is likely.

Brent crude futures, the international energy benchmark, are on track to rise by 26% this quarter having climbed to about $95 a barrel. On Tuesday, they added 0.4%, putting prices on track for a four-day streak of gains and rises in 13 of the past 16 trading days. West Texas Intermediate futures, the U.S. benchmark, have jumped 29% this quarter to just over $91 a barrel.

Gasoline prices are already on the rise to a national average of $3.88 a gallon in the U.S. from $3.68 one year ago, AAA said. Gas costs jumped 11% from July to August, driving more than half of overall inflation for the month.

Meanwhile, the price of diesel, which often fuels trucks and factories, has soared even faster, especially in Europe. In the U.S., the average price is $4.58. Data from Britain this morning showed inflation fell faster than expected last month, but rising fuel prices were an outlier to that trend.

U.S. oil stockpiles fell by 5.25 million barrels last week, the API is said to have reported. That would bring holdings to the lowest in more than nine months if confirmed by the EIA today. Meanwhile, Goldman Sachs today raised its price target for Brent crude to $100, joining a growing club that predicts triple-digit oil heading into the winter.

As energy costs are on the rise, Pimco money manager Geraldine Sundstrom, says markets are underestimating the risk of another rate hike before year-end. “Higher for longer” is likely the mantra for US rates as “inflation will remain a little bit stickier than expected,” Sundstrom said.

Another important note for agriculture is the U.S. dollar is staging a comeback, surging in value despite earlier predictions of a decline, while economic growth in China and Europe faces challenges. This reversal in the dollar’s fortunes began in July, defying expectations of a retreat that were based on the belief that the Federal Reserve’s interest rate hikes were approaching their conclusion.

The dollar’s resurgence is now reminiscent of its strong performance in 2022, a year marked by economic disruptions as it drove up commodity prices in global markets and increased the burden of foreign debts for many. Mark Nash of Jupiter Asset Management characterized the dollar’s current strength as formidable, noting that he had abandoned his pessimistic stance on the dollar earlier in the year.

Diesel Prices Up 78¢ from January 2022

Tue, 07 Feb 2023 14:14:11 GMT

According to the Energy Information Administration , the average U.S. price of diesel ran $4.62 a gal. in the week that ended Jan. 30, up 78¢ from a year earlier. On the East Coast, diesel sold for $4.84 on average, a 98¢ annual jump.

Will Electric Vehicles Actually Drive Down Prices at the Pump?

Meanwhile, Europe has announced a ban on Russian diesel fuel and other refined oil products--a move that will further curb its own energy dependence on Russian energy, while attempting to limit Russia’s gains from it’s energy sector. The ban allows for a 55-day grace period for diesel loaded on tankers prior to Sunday.

The move comes shortly after G7 countries announced a price cap on refined Russian oil products, which took effect on Sunday. Fuel oil and other low-value exports will be capped $45. A cap of $60 already applies to Russian crude.

Are Landlocked Soybean Crush Facilities Destined to Survive?

Insurers and shippers are prohibited from dealing in items covered by the cap unless they were bought below or at the designated price.

Will a Fuel Boycott Lead to Decreased Prices at the Pump?

Wed, 05 Oct 2022 18:44:12 GMT

Want lower fuel prices? Boycott filling up your fuel tank over the Independence Day weekend, says the people of social media.

A nationwide boycott has filtered through social media channels, encouraging consumers to refrain from buying gasoline and diesel July 3 to 5, claiming this act will be a step towards lower fuel prices.

With the national average price of regular gasoline at $4.95 and diesel at $5.81, AAA reports , consumers continue to look for ways to decrease the pain at the pump.

As Independence Day nears, AAA predicts “47.9 million people will travel 50 miles or more from home over the holiday weekend (June 30 – July 4).” This is an increase of 3.7% over last year and will set a new volume record despite historically high fuel prices, AAA notes.

AAA also says car travel specifically is expected to break previous records as 42 million people opt to drive instead of other travel methods.

“Recent issues with air travel and ongoing concerns of cancelations and delays may be driving this increase,” AAA adds.

Do Fuel Boycotts Work?

“I’ve never seen a gas boycott result in anything,” says Patrick De Haan of GasBuddy in a Money article.

Though consumers might boycott the pump July 3 to 5, its expected they will still buy fuel, simply shifting to days before or after the holiday.

Overall, the decrease in demand is likely minimal.

Long-term trends, such as the conflict in Ukraine and reduced refinery capacity, continue to drive up the price of crude oil, Money reports. Until crude oil prices fall, fuel prices will likely stay at higher levels.

A more effective way of instantly decreasing fuel prices would be to suspend gas and diesel taxes; however, that move will have its own long-term consequences.

Has Fuel Demand Decreased?

Fuel demand seems to be a topic of debate.

On a recent Pro Farmer audio update, host Davis Michealsen notes American drivers are beginning to buy less gasoline as they feel the economic burden of record prices.

Additionally, “In the first full week of June, gasoline sales at U.S. stations were down about 8.2% compared with the same week last year, according to surveys by energy-data provider OPIS,” Jim Wiesemeyer reports.

While AAA’s Paula Twidale reports, “Earlier this year, we started seeing the demand for travel increase and it’s not tapering off. People are ready for a break and despite things costing more, they are finding ways to still take that much needed vacation.”

How has your travel changed in response to high fuel prices?

John Phipps: It's Now Less About the Supply of Oil, And More About Refining Capacity in the U.S.

Thu, 14 Jul 2022 20:42:26 GMT

Infuriating price increases are the topic of the day and but like the 80’s rising inflation is driven largely by energy. The price of oil is a huge factor in about everything we buy. Oddly enough, it is now less about the supply of oil, and more about refining capacity.

Refining capacity starts with the number of operable plants, which has been slowly falling for years. The pandemic oil demand plunge prompted the closure of some refineries, especially older, less efficient ones.

Starting up a shutdown plant is a long and difficult process, so industry analysts doubt any of them will ever reopen. Add in a hurricane in Louisiana and an explosion in a Philadelphia plant and our capacity to refine is at an 8-year low. Keep in mind there has not been a new refinery built since the 1970’s in the U.S.

The operating plants are running at historically high levels as well. Now imagine you are an oil executive and your financial staff just brought in the latest profit figures shown here and your neighbor took delivery of a Rivian electric pickup. What possible logic would make you consider building or even upgrading any of your refineries?

Whether we think EVs are the future or not, the oil industry looks at the car industry and sees a future of stagnant if not falling demand. The amount of oil available, and the price, is of course a factor, but it sure hasn’t hurt refiners’ profits, so why do anything other than milk this elderly cash cow as long as possible? The implication for me is it’s hard to imagine gas prices falling much without a pretty stiff recession stifling demand. For that matter, if fuel demand should decline, I think refiners will simply accelerate plant closures. Investors agree and would not reward an oil company building or upgrading for new capacity. The refinery bottleneck also means efforts to increase the oil supply may not have much effect. It’s like getting a bigger combine when your trucking capacity is the problem.

The switch to EVs will not be as rapid as many think, and even less so in rural America, but we’re close enough to the peak of oil demand for transportation at least to have a big impact on long term plans in almost all sectors.

And by the way, I saw my first local Rivian and have neighbors on the list for electric F-150s. At the same time solar panel installations are popping up at farms like waterhemp. High energy prices can change attitudes.

Biden to Call on Congress to Suspend Gas and Diesel Tax This Summer

Wed, 22 Jun 2022 14:04:50 GMT

President Biden is expected to call on Congress to suspend the federal gas and diesel taxes for the next three months, the latest effort by the White House to provide relief to Americans struggling with record-high gasoline and diesel prices. The move is contingent on legislative action, which would temporarily lift the 18.3 cents tax per gallon on gasoline and 24 cents tax per gallon on diesel during the summer months.

The three-month timeframe was specifically to address the surging gas demand during the summer months when travel increases. In the longer term, however, a Biden administration official acknowledged the revenues from the tax are a vital source of infrastructure funding.

Biden will lay out the proposal in a speech from the White House this afternoon when he will also call on states to suspend their gas taxes or provide rebates or other forms of relief, the official said. Additionally, Biden is expected to call on oil refinery companies to take steps to boost production.

Biden will also ask Congress to replenish the Highway Trust Fund, which is supported by gas taxes, with other revenue to make it “whole” amid a gas tax suspension. The White House estimates it would take about $10 billion to do so. That may be a way to garner some additional Democratic votes for the gas and diesel tax suspension.

Energy Secretary Jennifer Granholm is separately holding a meeting with oil executives on Thursday to discuss ways to reduce gasoline and diesel prices, after Biden sent a letter to seven major companies demanding they take action to help lower costs for consumers. Executives from Exxon Mobil, Shell, Valero, Marathon, Phillips 66, BP and Chevron are slated to attend the meeting, the White House said.

Impact: When some states opted to suspend their own fuel taxes in the past, sometimes prices came back higher, according to a study released last week from the Wharton School at the University of Pennsylvania.

American drivers are starting to buy less gasoline as they feel the economic burden of record prices that continue to hover near $5 a gallon. In the first full week of June, gasoline sales at U.S. stations were down about 8.2% compared with the same week last year — the 14th consecutive week that sales have lagged behind 2021 levels, according to surveys by energy-data provider OPIS. In the week ended June 10, the Energy Information Administration’s measure of implied demand — an estimate of products supplied to consumers — declined by roughly 110,000 barrels a day from the prior week, to about 9.1 million barrels a day. That figure is down from about 9.4 million barrels a day the same time last year.

The WSJreports ( link ) that drivers have begun consolidating trips or filling up their tanks with only as much fuel as they need to get by for a few days. Some are carpooling or taking mass transit, while others are working from the office for fewer days each week.

Farmers Are Now Paying Above $5 For Off-Road Diesel, And It's More Than Just Russia to Blame

Tue, 14 Jun 2022 14:04:57 GMT

Gas prices keep crushing records in the U.S., but diesel prices are posting even more sticker shock as fears of a possible diesel shortage this year are also causing concerns. It’s not just retail diesel prices that are rapidly rising. There are now reports of farmers booking off-road diesel for farm use trending above the $5 mark, too.

(Farm Journal)

It’s an issue facing the trucking industry from coast to coast. AAA reports the national average diesel price is now $5.77 a gallon. A year ago, it was $3.21.

“It’s almost like every five minutes, I see the little live indicator tick up on our GasBuddy data,” Patrick De Haan, head of petroleum analysis, GasBuddy , told U.S. Farm Report two weeks ago.

GasBuddy tracks both diesel and gas prices in real time. And while the pain at the pump is something drivers are seeing across the country, it’s also an issue plaguing agricultural producers across the U.S.

“We had some farm diesel delivered yesterday, and it cost us $4.85 or $4.89 a gallon delivered. Two years ago, we bought fuel for just over $1,” Craig Moss, a farmer in Hull, Iowa, told Farm Journal’s Michelle Rook.

The rapid rise in input prices is eating into outlooks this year, even with high livestock and grain prices.

“It’s a challenging market, no doubt, buying $8 corn and $5.50 diesel; it’s a tremendous challenge for producers,” says David Newman, a pork producer in Myrtle, Mo.

While prices at the pump for both gas and diesel climbed this week, it’s a similar story for off-road diesel prices. A survey of farmers on Twitter drew a wide range of responses regarding the prices they are currently seeing. Farmers reported off-road diesel at $4.13 in the northern Corn Belt, while off-road diesel is now above $5 for those further east and in western states like Montana.

Research by Texas A&M Agricultural and Food Policy Center (AFPC) shows farmers are seeing nearly every input cost on their farm rise this year. Nitrogen prices produced the biggest increase, up more than 133% per acre year-over-year. Phosphorus and potassium fertilizer were up nearly 93% during that time. That was followed by fuel and lube, which jumped more than 86% compared to last year.

(Farm Journal)

The latest baseline projections from the University of Missouri Food and Policy Research Institute (FAPRI) also shows the sharp rise in fuels costs today.

“A 57% increase may or may not capture what’s happening right now throughout the whole calendar year of 2022, but it is capturing at least the part that we’re seeing right now,” says Bob Maltsbarger, a senior research economist with FAPRI.

FAPRI’s baseline projection shows even if fuel prices retreat the second half of this year, higher overall production costs will continue to sway balance sheets. Maltsbarger points out diesel prices vary by not only geography, but also by farm, especially considering crops like corn typically require more fuel use.

“It will vary quite a bit on the dollars-per-acre impact, but if you have about an equal increase on a percentage change basis, you will see those dollars per acre be more expensive in this calendar year,” he says.

Why Are Diesel Prices So High?

Why have diesel prices raced higher this year? It’s largely due to a shortage of refining capacity, not a shortage of oil, but the prices started to climb higher long before Russia invaded Ukraine.

“The nation is dealing with about a million barrels a day less of capacity than we had just three years ago. That’s the equivalent of about 5%,” De Haan explains. “So, not only is oil a problem with sanctions on Russia’s oil, but turning that oil into something like gasoline and diesel is also now a choke point.”

“Refineries have less capacity; we have about 1.2 million barrels a day of less capacity because of shutdowns that occurred prior to the pandemic,” says Debnil Chowdhury, vice president, head of Americas Refining, S&P Global Commodity Insights. “Also during the pandemic, we’ve had some convergence to biofuels’ facilities as well as a refinery that was hit by a hurricane and damaged to the point where it can’t really be run anymore.”

S&P Global Commodities is also watching the situation. At a time when the U.S. is typically building inventory, the opposite is occurring, which is also heightening concerns about a possible shortage.

“This is the year we’re running very low on inventory entering the summertime, and any type of impact on refining capacity is really going to increase the chance of the shortage,” says Chowdhury.

One Hurricane Away from a Diesel Shortage?

With supplies already tight, De Haan says the U.S. can’t afford to lose any refining capacity, which is a major risk considering NOAA is projecting an above-normal hurricane season.

“We’re probably one Category 3 storm away [from a shortage], and that Category 3 storm would have to take aim for an area roughly from the Mississippi River to Houston,” says De Haan. “That’s the really sensitive area. Not only could it affect refining, but it could affect offshore oil production.”

One of the reasons inventories are already tight is due to Hurricane Ida making a direct hit along the Gulf Coast. Refineries located near New Orleans went offline last fall, with some still not back online today. That major hurricane, and the devastation it caused, was one of the initial dominoes to fall for diesel prices.

“This all actually started before the war. It began in October of last year, when natural gas prices in Europe started to rise,” Chowdhury says. “The cost of natural gas increased substantially in Europe, and why that’s important to a Midwest farmer is because the cost of producing that diesel increased with it.”

Searching for Solutions

While the financial incentive is there today to pump more oil and increase refining capacity, one worker in the oil industry told U.S. Farm Report that the push to electric has investors concerned about the risk of such an investment. And considering it takes years for refining capacity to come online, that’s also not a solution today.

There’s talk of the Biden administration tapping into diesel reserves to help ease supply concerns, but De Haan says not only will that move have a minimal impact, it’s also a question of timing.

“It’s only a million barrels, so it’s not a infinite amount of supply,” he says. “The worry is that if we release those barrels of diesel now from areas in the Northeast, we’re also in the start of hurricane season. Now we do have some tropical activity. So when do you use the inventories? Do you use them now because of high prices? Or, do you wait for a bigger potential issue later this summer?”

(Farm Journal)

In order to relieve the tight diesel supply situation, Chowdhury points out the other option is for the government to wave the Merchant Marine Act of 1920, otherwise known as the Jones Act.

“The U.S. refiner now has to decide do we send product to Europe? We can send it via pipeline easily, but because of the Jones Act, which is a regulation that mandates U.S. flagged vessels from port to port, it’s not something that we could do now. And that’s something that the government could look at waving if we do face a shortage,” says Chowdhury.

The Jones Act is a federal statute that was established more than 100 years ago. It requires all vessels carrying good between two U.S. points be American-built, owned, crewed and flagged. The policy was created to help sustain American jobs, and in turn, generate economic benefits each year. Proponents claim the Jones Act has secured critical movement of goods over the years.

How Long Could the Diesel Price Pain Last?

While the industry searches for possible solutions, those who follow and track refineries don’t see a dramatic drop in diesel prices anytime soon.

“These prices are not going to go back to the levels we had at the beginning of 2021. It’s more likely that we’ll see maybe, you know, a $5 to $10 decline in crude price, and that would equate to maybe 50¢ to 60¢ on the diesel price itself. We’re not talking about a major relief,” Chowdhury says.

On the heels of diesel prices climbing higher again this week, anyone hoping for relief might have to look out beyond this year.

“It could take a couple of years. Keep in mind the longer we go down this road, and that demand eclipses supply, the more catching up we’re going to have to do,” De Haan says.

Diesel Prices Smash Another Record — And the U.S. is Now One Hurricane Away from Running Out of Diesel

Fri, 03 Jun 2022 22:18:19 GMT

Diesel prices smashed another record Friday, with prices hitting $5.58 a gallon. With NOAA predicting an above-normal hurricane season, it’s not good news for crop production close to the Gulf Coast or for already short diesel supplies.

The start to the hurricane season is underway. As of Friday, more than 10 million people in southern Florida, Cuba and the Bahamas were under a tropical storm warning for the weekend.

If the tropical storm would track farther west, it could spell trouble for diesel supplies as experts say the U.S. is one hurricane away from a shortage this year.

“We’re probably one Category 3 storm away [from a shortage], and that Category 3 storm would have to take aim for an area roughly from the Mississippi river to Houston,” says Patrick De Haan, head of petroleum analysis, GasBuddy . “That’s the really sensitive area. Not only could it affect refining, but it could affect offshore oil production.”

A Category 3 is the third-highest classification on the Saffir–Simpson hurricane wind scale, which brings tropical cyclones with at least 1-minute maximum sustained winds between 110 mph and 129 mph.

Just How Tight Are Supplies?

Diesel supplies are vulnerable due to how tight supplies are today.

“This is the year we’re running very low on inventory entering the summertime and any type of impact on refining capacity is really going to increase the chance of the shortage,” says Debnil Chowdhury, vice president, head of Americas Refining, S&P Global Commodity Insights

Why have diesel prices raced higher and fears of a diesel shortage sprouted? It’s largely due to a shortage of refining capacity, not a shortage of oil.

“The nation is dealing with about a million barrels a day less of capacity than we had just three years ago. That’s the equivalent of about 5%,” De Haan says. “Not only is oil a problem with the sanctions on Russia’s oil, but turning that oil into something like gasoline and diesel is also now a choke point.”

Hurdles in Increasing Production

S&P Global Commodities is also watching the situation. At a time when the U.S. is typically building inventory, it seems hurdle after hurdle is making that more difficult.

“Refineries have less capacity; we have about 1.2 million barrels a day of less capacity because of shutdowns that occurred prior to the pandemic,” Chowdhury says. “Also during the pandemic, we’ve had some convergence to biofuels facilities as well as a refinery that was hit by a hurricane and damaged to the point where it can’t really be run anymore.”

Still Recovering from Hurricane Ida

Another issue is refineries hit by Hurricane Ida last fall that never came back online. That major hurricane, and the devastation it caused, was one of the initial dominoes to fall for diesel prices.

“This all actually started before the war. It began in October of last year, when natural gas prices in Europe started to rise,” Chowdhury says. “The cost of natural gas increased substantially in Europe and why that’s important to a Midwest farmer is because the cost of producing that diesel increased with it.”

There’s talk of the Biden administration tapping into diesel reserves to help ease supply concerns, but De Haan says not only will that move have a minimal impact, it’s also a question of timing.

“It’s only a million barrels, so it’s not a infinite amount of supply,” he says. “The worry is that if we release those barrels of diesel now from areas in the Northeast, we’re also in the start of hurricane season. Now we do have some tropical activity. So when do you use the inventories? Do you use them now because of high prices? Or do you wait for a bigger potential issue later this summer?”

Diesel Price Pain to Last for Two Years?

While a possible diesel shortage is looming, diesel prices aren’t forecast to see a dramatic drop anytime soon.

“These prices are not going to go back to the levels we had at the beginning of 2021, it’s more likely that we’ll see maybe, you know, a $5 to $10 decline in crude price, and that would equate to maybe 50¢ to 60¢ on the diesel price itself. We’re not talking about a major relief,” Chowdhury says.

On the heels of diesel prices climbing higher again this week, anyone hoping for relief might have to look out beyond this year.

“It could take a couple of years, and keep in mind, the longer we go down this road that demand eclipses supply, the more catching up we’re going to have to do,” De Haan says.

Will Record-High Diesel Prices Race Even Higher with EU's Partial Ban on Russian Oil?

Tue, 31 May 2022 20:50:28 GMT

After much talk, the European Union (EU) agreed to a partial ban on Russian oil. The decision late Monday will cut its Russian oil imports by nearly 90% over the next six months. Overall, the EU relies on Russia for 25% of its oil needs and 40% of its natural gas.

According to European Council Chief Charles Michel, the ban “immediately covers more than two-thirds of oil imports from Russia, cutting a huge source of financing for its war machine.”

However, unlike the ban imposed by the U.S., this is not a quick ban. The process will take six months, a timeline that Debnil Chowdhury, vice president and head of America’s refining for S&P Global Commodity Insights, explains as one reason crude oil prices didn’t jump double digits Tuesday.

“This is going to take quite a bit of time for those sanctions to come into play,” Chowdhury explains. “It’s not like when the U.S. announced 45 days, it’s more like six months, and the market had already factored in that this was going to happen. That’s why we didn’t see crude prices go up $15 to $20 today. It wasn’t a surprise since this has been talked about for the past month.”

I just paid 5.71 here in PA
— Brian Heher (@BrianBheher) May 31, 2022

Even with the partial ban by the EU, Chowdhury says it’s possible diesel prices see a slight reprieve in the coming weeks; however, it won’t come in the form of dollars. He says the reprieve will be more like 50 to 60 cents.

“I think the bigger thing, the bigger reason we would see prices fall is because underlying gasoline demand and diesel demand and jet fuel demand eventually get impacted by these higher prices,” he says. “So the demand leads to less pull on crude oil. And then that loosens up the crude oil market somewhat. And then we’d have a reduction in underlying crude price that would bring diesel down with it.

“But these prices are not going to go back to the levels we had at the beginning of 2021,” he adds. “It’s more likely that we’ll see maybe $5 to $10 decline in crude price, and that would equate to maybe 50 to 60 cents on the diesel price itself. So we’re not talking about a major relief.”

Diesel Prices Were Climbing Even Before Russia Invaded Ukraine

Chowdhury points out the rise in diesel prices was happening even before Russia invaded Ukraine. The invasion, combined with sanctions, added more strain to the situation, which is why he doesn’t see diesel prices seeing significant declines anytime soon.

The Biden administration was reportedly weighing tapping into diesel reserves to help with tight diesel supplies. However, that wouldn’t help the situation much either, considering those reserves are relatively small when you measure the entire scope of diesel demand and needs.

“The release would not help reduce prices materially across the entire U.S. but may provide some small localized relief where the reserve is located in the Northeast,” he says. “The U.S. 5-year average inventory for late May has been near 130 million barrels. Currently we are at critically low levels, 107 million barrels. The reserve is only 1 million barrels. Even if the entire reserve was released, total U.S. inventory would remain considerably below average.”

Filling A Tractor Tank Daily Now Costs Some Farmers $1,000, Double What It Did a Year Ago

Fri, 20 May 2022 20:17:40 GMT

Filling a tractor tank daily now costs some farmers $1,000, twice what it was a year ago. And the most intensive part of the farming season is still ahead.

U.S. diesel prices are the highest ever, with warnings of shortages, especially in the eastern U.S.

“Diesel is the lifeblood of farming,” Iowa corn and soybean farmer Ben Riensche told Bloomberg.

Inputs Forecast: Fuel Prices Higher, Could Be Volatile

Fri, 20 Nov 2020 05:17:08 GMT

Fuel prices are difficult to predict in the current political environment. There will be opportunity to lock in low prices, but the fuel market could experience volatility depending on discussions between the current administration and countries such as Saudi Arabia.

“If they [traders] feel good about the market there is nothing to worry about, but at the first hint of bad news or tension [with trade partners in the Middle East] buyers in the futures market drive prices higher, which trickles down to us,” says Davis Michaelsen, Pro Farmer Inputs Monitor Editor.

If you’re looking at farm diesel it’s also important to consider it is also used for heating oil, particularly in the Northeast. A harsh winter could push those prices higher on top of anything going on in the Middle East.

“Prices are uncertain right now,” Michaelsen explains. “We’ve been steady, and diesel has been good about taking the crude oil market in stride. Here, peak season, I’m just a penny above the July price.”

However, he says volatility could soon come into play. Certain experts are predicting $100 per barrel crude oil, which could make prices jump to $3.25 per gallon. Right now crude oil is about $75 per barrel, with farm diesel around $2.58 per gallon.

“Usually we find good opportunity to book farm diesel for spring that week between Christmas and New Year’s, plus or minus a week,” Michaelsen says. “There’s a price dip to take advantage of.”

Propane also looks like it could be higher this coming season.

“We’re looking at a propane price reset at about 20 cents higher than they have been in the past two to three years,” Michaelsen says. “There’s lot of drying this year and if the forecast comes to be with a cold winter, propane prices will reflect that added demand.”

He says prices could climb as high as $1.60 per gallon—or about 30 cents higher than today’s price. That will likely be in the middle of winter when people have immediate demand. That potential 30 cent jump in the busy season, combined with the 20 cent jump means buying at the wrong time could be a 50 cents per gallon misstep.

“We advise and propane experts advise that you keep your on-farm storage full,” Michaelsen says. “You don’t want to get where you have to order propane in the middle of the night. Calculate your needs and fill storage to the top.”

Read the rest of the Input Forecast series:

Inputs Forecast: Fertilizer Prices Increase For First Time In Years

Inputs Forecast: Resistance Could Increase Pesticide Expenses

Inputs Forecast: Get Creative To Save On Seed Costs

Farmers Worldwide Struggle with Rising Fuel Costs

Fri, 20 Nov 2020 05:12:18 GMT

Farmers worldwide are feeling the pinch as fuel costs rise to near four-year highs just as they plant and harvest their fields, eroding agricultural income already hamstrung by depressed crop prices.

The agricultural sector from the United States to Russia, and Brazil to Europe, is seeing profits harmed by the rise in diesel prices. The global oil benchmark, Brent crude LCOc1, touched $80 a barrel for the first time since late 2014 on Thursday.

Coupled with local economic issues, the increase is making it even harder for many farmers worldwide to turn a profit in the estimated $2.4 trillion agriculture industry, casting a cloud over future investments.

In the United States, fuel accounts for about five percent of farmers’ overall costs, and is hurting margins at a time when farm income is already half that of 2013. Massive harvests have depressed prices of staples such as corn, wheat and soybeans.

Diesel fuel is essential for planting, harvesting, and shipping crops to market. In the United States, farmers will spend an estimated $15.25 billion on fuel and oil in 2018, an 8 percent increase from 2017, U.S. Department of Agriculture data showed.

The price of ultra-low sulfur diesel used for farming equipment and transporting crops has not been this high in May since 2014. Heating oil futures, the proxy for ultra-low sulfur diesel, traded at $2.29 a gallon on Thursday.

Ron Heck, who grows soybeans in Perry, Iowa, said his fuel costs could go up $1,000 to $2,000 during the northern hemisphere’s spring.

“You feel the pain right away,” Heck said.

In Russia, fuel prices for farmers are up 50 percent compared with a year ago, Arkady Zlochevsky, the head of Russia’s Grain Union, a non-governmental farm lobby, told Reuters. Farmers will need to spend more ahead of harvesting, which starts in about a month in Russia, he said.

For a graphic on farmers’ cash expenses, click tmsnrt.rs/2rXHHQf

Financial Stress

U.S. farms are also factoring in potential losses of income due to a 25 percent tax China announced on major American imports following the U.S. government’s decision to slap duties on steel and aluminum.

“We’re seeing financial stress occurring in agriculture that we probably haven’t seen for a decade or so,” said Scott Brown, director of strategic partnerships at the University of Missouri’s College of Agriculture, Food and Natural Resources. “If diesel prices continue to go higher, it continues to put more pressure on [farmers].”

Net farm income is forecast to fall to $59.5 billion in 2018, an 8.3 percent decline from 2017, according to the USDA. It has fallen by 55 percent since 2013.

In Holly Grove, Arkansas, Tim Gannon paid about $17,000 in February to fill a 7,500-gallon tank with diesel used to run equipment and irrigation. The price increase means it may cost up to 25 percent more, or an extra $4,000, to refill it in coming weeks, he said.

“That’s a fairly significant amount of income to lose,” he said. Gannon has been taking steps to cut his diesel costs over the past year by reducing the number of times he plows, or tills.

In Brazil, farmers are also taking steps to deal with higher costs, as diesel prices have climbed 43 percent in the country since July 2017. Eder Ferreira Bueno, a farmer in grain state Mato Grosso, said increased fuel costs meant he had “no other option but to spend less to treat the soil.” Other farmers might hire fewer workers or delay investment plans, he added.

In neighboring Argentina, the top shipper of soybean meal and oil worldwide, farmers are having to deal with a weakening currency at the same time fuel costs are rising.

“Where the impact is felt greatest is in trucking costs. We are already at a disadvantage when compared to our competitors on freight costs within Argentina,” said David Hughes, a farmer in Buenos Aires province and president of Argentine wheat industry chamber Argentrigo.

In Europe, French grain producers say rising oil costs may have a knock-on effect on fertilizers and crop protection products.

“It comes at a time when things are already difficult for farmers economically,” said Philippe Pinta, head of grain growers group AGPB in Paris.

Wamego, Kansas, farmer Glenn Brunkow said he may lock in diesel prices in advance for the first time ever next year, to avoid the pain of future increases.

“You just kind of all of a sudden realize, ‘Wow, it’s pretty high,’” he said.

Fuel

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Diesel Price Pain to Last for Two Years?

Will Record-High Diesel Prices Race Even Higher with EU's Partial Ban on Russian Oil?

Diesel Prices Were Climbing Even Before Russia Invaded Ukraine

Filling A Tractor Tank Daily Now Costs Some Farmers $1,000, Double What It Did a Year Ago

Read more: Diesel Prices Just Hit a New Record High, Here’s Why a Diesel Shortage May Be Next

Inputs Forecast: Fuel Prices Higher, Could Be Volatile

Farmers Worldwide Struggle with Rising Fuel Costs

Financial Stress