High diesel prices squeeze margins for US Corn Belt farmers

A sharp rise in diesel prices is increasing costs for US farmers during the peak corn and soybean harvest across the Midwest. Around 20 bln bushels of corn and soybeans, or 522 mln tons, are expected to be harvested in the region by the end of November.

Higher fuel prices could add around $12,500 in costs for every 1,000 acres harvested. In September, diesel prices in Illinois, Michigan, Ohio and Indiana were more than $3/gal higher than a year earlier.

Prices are being driven by the war with Iran, damage to refineries in Russia and domestic fuel supply disruptions in the US. Additional pressure has come from the shutdown of an ExxonMobil refinery in Illinois and a prolonged labor dispute at a major BP refinery in Indiana.

For farmers, more expensive fuel means further pressure on margins, while seed, crop protection and machinery costs also remain high. Some growers are trying to reduce diesel use through no-till practices and cover crops, which lower the number of field passes required.

However, large fuel costs during harvest and grain transportation remain unavoidable. Higher diesel prices are raising both fieldwork and logistics costs, putting additional pressure on the profitability of US corn and soybean producers.

Tags: corn, USA, diesel fuel, diesel