Diesel Prices Hit Record High, Threatening Farm Profits

U.S. diesel prices have reached an all-time high of $5.94 per gallon, up four cents from Monday's record, according to automobile club AAA. This surge in fuel costs threatens farm profits as farmers prepare for the harvest season.

The average price of U.S. diesel is 61% higher than last year, and experts predict another downturn for key crops this year due to high input costs and government aid struggles. Despite a short-lived drop in fuel prices following a thaw in U.S.-Iran hostilities, renewed attacks have pushed up prices again.

'The rise in diesel fuel is going to probably eat up what was able to be made there in the margins,' said Bradley Guse, Wisconsin-based director of BMO's Agribusiness Group. 'It's nice to see the bounce in the corn market and bean markets, but it's really hard to get excited about it when it's not going to mean anything to the bottom line.'

Ag economists warn that farmers have limited ability to pass fuel increases directly to grain buyers, making operational efficiency crucial for managing costs. The Energy Department sharply raised its forecast for U.S. diesel prices next year, predicting an average of $4.40 per gallon in 2027.