Diesel prices have been on the rise for Midwest agricultural producers, and Nebraska farmers have especially felt the repercussions.
The state’s soybean and corn growers spent a combined $110 million more on diesel fuel during the planting season than last year, according to research from AAA, the U.S. Department of Agriculture and Iowa State Extension.
That places Nebraska fourth in the country in increased spending, behind only Illinois, Iowa and Minnesota.
Ann Johanns with Iowa State University Extension said that diesel prices tend to increase naturally over time, but they’re usually offset by rising grain prices. That isn’t happening this time around.
“When we’ve seen those increases in the past, those have usually come with a similar increase in grain prices,” she said. “And that’s what we didn’t see, and that’s why they’re feeling it differently than in the past.”
Diesel prices have shot up nearly 50% since last fall, spurred upward by the uncertainty over the Iran war and its effect on the Strait of Hormuz.
Johanns said recent reports seem optimistic about the future for crop markets, and every little bit helps.
“The market outlook on crop supply and demand is looking a little more positive than what we’ve had this year,” she said. “There could be less of a crunch, but I don’t think high production costs are going anywhere. Tight margins are still the story for 2027.”
Machinery costs make up a huge chunk of production overhead for Nebraska ag producers, and Johanns said diesel can account for about 25% of those costs.
“In the grand scheme of the operation, it may not be the largest category, but it is definitely significant, and it certainly is making a difference," she said.