Four Midwest states saw diesel jump over $3 per gallon year-on-year
The soybean harvest is opening across the eastern corn belt, and Midwest farmers are bracing for what The Guardian describes as a record diesel bill for the season. Fuel costs are biting crop growers, trucking firms and a host of other industries as the Iran war stokes record prices, the newspaper reported.
Joe Hamilton, who farms corn and soybeans on 2,500 acres in Indiana’s Delaware County, starts his soybean harvest next week, when four tractors, two combine harvesters and five semi-trucks roar to life. A record bill for about 9,000 gallons of diesel awaits him. “During harvest, we use about 300 gallons of diesel fuel per day, and we have around 30 harvest days in a typical fall,” he said. “Farmers are price takers. It’s not just fuel—it’s chemicals, it’s seed, it’s the cost of equipment. Everything has increased along with the commodity prices.”
Alongside farmers, manufacturers, trucking companies and store owners in the midst of ramping up orders for the holiday buying season are facing the fallout of higher diesel costs, The Guardian reported.
The pressure is concentrated regionally. Four of the five states with the highest weekly diesel price increases in the country in September were in the Midwest — Illinois, Michigan, Ohio and Indiana — where fuel jumped more than $3 per gallon compared with a year ago, according to figures cited by The Guardian. An estimated 20 billion bushels of soybeans and corn (522 million metric tons) are set to be harvested across the Midwest between now and the end of November. Estimates suggest the war with Iran, damaged refineries in Russia and regional diesel supply disruptions could add an additional $12,500 in fuel costs for every 1,000 acres of crops harvested.
On top of the war on Iran, regional issues are playing a role. A power outage and flooding last month at an ExxonMobil refinery in Joliet, Illinois, shut it down for more than a week, taking more than 80 million gallons of diesel and gasoline offline. An ongoing six-month dispute between union members and BP at one of the largest refineries in the country, in Whiting, Indiana, has also fueled a surge in prices regionally, The Guardian reported.
The Midwest differs from the coasts or even the Gulf primarily in its lower number of oil refineries and how it can respond in times of crisis, Kurt Lykins, a lecturer at Otterbein University, told The Guardian. “If you have water access you can bring tankers in with additional oil. So, it’s hard for the midwest to respond,” he said.
Lykins also said he is concerned about the Strategic Petroleum Reserve — the 714-million-barrel-capacity reserve held in salt caverns in Texas and Louisiana that today is lower than at any time in the past 43 years. “We’ve drawn down 172m barrels. Although the prices for gasoline and diesel have been rising, drawing down from the reserve has given some stability to prices,” he said. But that could soon change, he noted. “The issue is when we are no longer able to do that, the stability will no longer be there. We’re getting ready to go into a high diesel demand season in winter.”
The cost pressure reaches beyond the farm gate. In Ohio, 15,000 school buses that overwhelmingly run on diesel carry about 800,000 grade-school students to and from their homes every school day, The Guardian reported. The Columbus school district — already facing a potential $157 million financial deficit by 2031 — has recently had to cut nearly 300 jobs, close four schools and limit bus service for students. “I believe we are contracted through 2027, so no major changes [are being put in place] at this time,” Michael S Brown of the Columbus school district told The Guardian. “That said, we are constantly looking at bussing as a budget issue, at more than $70m total cost per year. I expect there will be transportation changes to the system in the next budget.”
Almost 40% of school districts that participated in a national survey published in May said they are consolidating bus routes to help reduce diesel fuel expenses, according to The Guardian. That means longer commutes and working hours for students and drivers alike, and 20% of those surveyed said they had cut “non-required trips” such as field trips. “Any school district that’s using last year’s budget needs to refine that upwards,” Lykins warned. He said the increase is not the same across school districts, with rural districts even more impacted because they transport more students over further distances.
Back on the farm, growers such as Hamilton are looking to reduce fuel costs by using no-till and cover-crop farming methods, which cut the number of times he has to put diesel-guzzling machinery in the field. He now uses between two and four gallons of diesel per acre in a typical year. “It’s much less than we used when we were a full tillage operation,” he told The Guardian.
But getting crops to market this fall leaves no way around elevated fuel prices. Hamilton told The Guardian that limited fuel storage capacity at his farm will force him to buy more diesel in the coming weeks to cover the back end of the 2026 harvest, and with nearly half of his harvesting fleet consisting of semi-trucks that use the more expensive on-road diesel — red-dyed agricultural diesel typically carries no federal fuel tax — uncertainty remains.
“Fuel is $3 more expensive than it was 12 months ago. Soybeans right now are $12.88 per bushel, last year they were $10.14 but corn is $5.23 now versus $4.22 a year ago,” he said.
Lykins said the high prices are not going away anytime soon. “Let’s say everything goes back to normal — we still need to build up the [Strategic Oil] Reserve and that’s going to slow the drop in prices for consumers. That’s the best-case [scenario],” he told The Guardian. A report issued by the Government Accountability Office in May found that several of the Reserve’s caverns in Louisiana may see their capacity reduced due to stability concerns in a neighboring cavern that was recently decommissioned.