The Cost of the On-Farm Fuel Bill
Farmers and ranchers have been struggling over the last few years to make ends meet with record yields, low crop prices, and skyrocketing input costs. After the initial round of tariffs issued by the Trump Administration, input costs continued to climb for American farmers and ranchers and last year’s growing season put many banks on shaky ground to issue operating loans for the 2026 crop year. The Trump administration has remained “all hat, no cattle” on their promises to improve the farm economy since taking office and the war in Iran is no exception. The Strait of Hormuz is a channel of water between Iran and the United Arab Emirates. Currently, Iran has more or less blocked passage through the strait which results in increased, and climbing, oil prices.
Since February 28th, U.S. gas prices have risen more than a dollar for regular grade and diesel has surged by nearly two dollars. While average fuel costs vary, the South Dakota State University (SDSU) Extension estimates that farmers consume between 2 and 6 gallons of diesel per acre during a growing season. Just one month ago, a farmer managing a 640-acre section would have faced an estimated fuel bill of $12,022.40 for the 2026 crop (based on AAA’s February diesel average of $3.75 per gallon and a 5-gallon-per-acre average). Today, with diesel hitting $5.38 a gallon, that same farmer faces a bill of $17,216.
This spike is no fluke. AAA reporting shows a rapid ascent: last week’s average was $5.16, yesterday was $5.37, and today it sits at $5.38. In response, the Trump Administration waived summer gasoline regulations this week to allow the sale of E15—a 15% ethanol, corn-based blend. While the EPA estimates E15 could lower pump prices by $0.10 to $0.30, the benefit to producers is lopsided. Farm machinery runs almost exclusively on diesel, which contains no ethanol. Farmers may see a marginal increase in demand for the 2026 corn crop, but the primary relief at the pump will only apply to small machinery or personal vehicles.
Furthermore, the U.S. has already seen nationwide summer sales of E15 from 2022 through 2025 via EPA emergency waivers. This suggests the “new” demand is already baked into the market. While a January appropriations package offered a chance for a permanent, year-round E15 fix, the provision was not included. House Agriculture Committee Ranking Member Angie Craig (D-MN) noted in a recent Op-Ed that the failure to include these provisions proves the House Majority has “no desire to do the job they were sent to Washington to do.”
https://onecountryproject.substack.com/p/the-cost-of-the-on-farm-fuel-bill