Joe Hamilton farms corn and soybeans on ۲,۵۰۰ acres in Indiana’s Delaware county. Next week, when his soybean harvest kicks off, four tractors, two combine harvesters and five semi-trucks will roar to life.
And with that, a record bill for about ۹,۰۰۰ gallons of diesel awaits him.
“During harvest, we use about ۳۰۰ gallons of diesel fuel per day, and we have around ۳۰ harvest days in a typical fall,” he says.
With diesel-guzzling combine machines now entering fields across the eastern corn belt for the beginning of the soybean harvest, crop growers, trucking companies and a host of other industries that rely on the fuel are dealing with record-high prices.
An estimated ۲۰bn bushels of soybeans and corn (۵۲۲m metric tons) are set to be harvested in the midwest between now and the end of November. Estimates suggest that the war with Iran, damaged refineries in Russia and regional diesel supply disruptions could add an additional $۱۲,۵۰۰ in fuel costs for every ۱,۰۰۰ acres of crops harvested.
“Farmers are price takers. It’s not just fuel – it’s chemicals, it’s seed, it’s the cost of equipment,” laments Hamilton.
“Everything has increased along with the commodity prices.”
As well as 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.
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), with the fuel jumping by more than $۳ per gallon compared with a year ago.
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, saw it shut down for more than a week, taking more than ۸۰m gallons of diesel and gas 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 midwest is different form the coasts or even the Gulf, primarily in the [lower] number of oil refineries and how it can respond in times of crisis. If you have water access you can bring tankers in with additional oil,” says Kurt Lykins, a lecturer at Otterbein University.
“So, it’s hard for the midwest to respond.”
Lykins adds that he’s concerned about the Strategic Oil Reserve – the ۷۱۴m-barrel-capacity reserve held in salt caverns in Texas and Louisiana that today is lower than at any time in the past ۴۳ years.
“We’ve drawn down ۱۷۲m barrels. Although the prices for gasoline and diesel have been rising, drawing down from the reserve has given some stability to prices,” he says.
But that could soon change, he notes.
“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.”
Amid the rising prices, large consumers of diesel fuel across the region are moving to reduce expenses where they can.
In Ohio, ۱۵,۰۰۰ school buses that overwhelmingly run on diesel are charged with getting about ۸۰۰,۰۰۰ grade school students to and from their homes every school day.
The Columbus school district, already facing a potential $۱۵۷m financial deficit by ۲۰۳۱, has recently had to cut nearly ۳۰۰ jobs, close four schools and limit bussing for students.
The diesel issue, say administrators at the largest public school system in the state, is front of mind.
“I believe we are contracted through ۲۰۲۷, so no major changes [are being put in place] at this time,” says Michael S Brown of the Columbus school district.
“That said, we are constantly looking at bussing as a budget issue, at more than $۷۰m total cost per year. I expect there will be transportation changes to the system in the next budget.”
Almost ۴۰% of school districts that participated in a national survey published in May say they are consolidating bus routes to help reduce diesel fuel expenses.
But that means longer commutes and working hours for students and drivers alike and ۲۰% 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,” warns Lykins.
“The sad thing is that this increase is not the same across school districts – rural districts are going to be even more impacted because they transport more students over further distances.”
Back on the farm, crop growers such as Hamilton are looking to cut down on fuel costs by using no-till and cover crop farming methods, which reduce the number of times he has to put diesel-guzzling machinery in the field. Now, he uses between two and four gallons per acre in a typical year.
“It’s much less than we used when we were a full tillage operation,” he says.
But in order to get his crops to market this fall, there’s no getting around paying elevated prices for machinery fuel.
Hamilton says that limited fuel storage capacity at his farm means he will be forced to buy more diesel in the coming weeks to cover the back end of the ۲۰۲۶ harvest, and with nearly half of his harvesting fleet consisting of semi-trucks that use the more expensive on-road diesel (by contrast, red dyed or agricultural diesel typically has no federal fuel tax), uncertainty remains.
“Fuel is $۳ more expensive than it was ۱۲ months ago. Soybeans right now are $۱۲.۸۸ per bushel, last year they were $۱۰.۱۴ but corn is $۵.۲۳ now versus $۴.۲۲ a year ago,” he says.
Observers say that the high prices aren’t 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,” says Lykins.
“That’s the best-case [scenario].”
What’s more, a report issued by the Government Accountability Office in May found that several of the Reserve caverns in Louisiana may see their capacity reduced due to stability concerns in a neighboring cavern that was recently decommissioned.
