By: NATHAN STUEDLE
Diesel prices have crossed another painful milestone for American agriculture. The national average price has now exceeded six dollars a gallon for the first time, just as farmers enter the heart of fall harvest. GasBuddy reported the record Thursday as global petroleum supplies continue tightening. Middle East disruptions, Ukrainian attacks on Russian refineries and fuel-export restrictions from Russia and China have all contributed to the increase. U.S. diesel inventories are reportedly about 13 percent below their five-year average, while diesel refining margins have also reached record levels.
For agriculture, the timing couldn't be much worse. Combines, tractors and grain trucks consume huge quantities of diesel during harvest, meaning every increase at the pump adds directly to production and transportation expenses. There could be one positive for agriculture: higher petroleum prices improve the relative economics of ethanol and renewable diesel.But for producers preparing to harvest millions of acres this fall, the immediate impact is straightforward — another substantial increase in operating costs.