Farm Fuel Costs Skyrocket Amidst Ongoing War in Iran

Farmers are facing higher fuel costs as diesel supplies tighten due to the ongoing war in Iran. Global diesel inventories remain tight, and officials are struggling to quantify oil flow from the region. Dave Chatterton with Strategic Farm Marketing notes that some oil producers have started using 'dark fleet' ships to transport oil without being tracked.

'We're having trouble quantifying how much oil is actually coming out of the Strait of Hormuz or the Red Sea region,' Chatterton said. The tight distillate inventories leave less cushion if agricultural and freight demand strengthen through harvest.

Diesel prices are also affecting livestock operators, with fuel costs up 25-30 percent year-over-year. Dr. Lee Schulz, Chief Economist at EverAg, notes that producers need to focus on non-feed costs as well. 'Fuel prices being up 25-30 percent year-over-year... A lot of times, when you look at grain operations, it's the inflationary costs that have really kind of increased that cost of production.'