Record Diesel Prices Squeeze US Farmers Amid Record Crop Harvest

US farmers are facing record diesel prices just as they begin their harvest season. Diesel fuel has hit an all-time high of $5.85 a gallon, up almost $2.14 from last year's price. This comes at a time when corn and soybean production is expected to reach new records, with the US Department of Agriculture forecasting 16 billion bushels of corn and 4.5 billion bushels of soybeans.

The high diesel prices are putting pressure on farmers' already thin margins. Drew Kientzy, an agricultural analyst at the University of Missouri, notes that harvest is the most fuel-intensive operation for farms, with midwestern farms burning around three to five gallons of fuel per acre of soybeans and five to eight gallons per acre of corn.

The tight distillate market is behind the price spike. The US diesel crack, which measures the margin refiners earn over crude oil, has hit a record high of $102.20 a barrel. Russia's ban on diesel exports through January and disruption from the Iran war are contributing to the shortage, with EIA data showing distillate stocks about 13 percent below the five-year average.