Nebraska Ag Producers Feel Pinch of Rising Diesel Prices

Nebraska's agricultural producers have been hit hard by rising diesel prices this planting season. According to research from AAA, the U.S. Department of Agriculture, and Iowa State Extension, soybean and corn growers in Nebraska spent a combined $110 million more on diesel fuel than last year.

This puts Nebraska fourth in the country for increased spending, behind only Illinois, Iowa, and Minnesota. Ann Johanns with Iowa State University Extension explained that rising diesel prices are usually offset by increasing grain prices, but this time around, grain prices have not followed suit.

Diesel prices have surged nearly 50% since last fall, largely due to uncertainty over the Iran war and its impact on the Strait of Hormuz. Johanns noted that recent reports suggest a more positive outlook for crop markets, which could alleviate some pressure on producers.

However, Johanns cautioned that high production costs are unlikely to decrease anytime soon, with machinery costs making up a significant portion of overhead expenses for Nebraska ag producers. Diesel can account for as much as 25% of these costs.