The average price of U.S. diesel reached a new all-time high of $5.94 a gallon on Wednesday, up 4 cents from the prior record set Monday, according to AAA. That puts prices up 61% from a year ago, reports Agri–Pulse.
Kim Chipman with Agri-Pulse says “Ag economists are predicting another downturn for key crops this year as Congress struggles to get billions of dollars in federal aid to growers on top of roughly $12 billion in payments from the Trump administration.”
USDA raised its forecast for 2026 farm earnings last week, citing high receipts for key crops and government payments. However, renewed attacks between Iran and the U.S. are pushing up fuel prices. The volatility, Chipman says, is making it tough for ag producers to hedge against high fuel costs.
AgroLatam’s Emily Trask reported that “fuel is one of the most visible farm expenses because producers purchase it directly, but the actual economic impact extends much further.”
“Diesel is embedded in fertilizer delivery, grain hauling, livestock transportation, custom harvesting, machinery services and nearly every stage of agricultural logistics. When diesel prices rise, farmers can pay twice: first through their own equipment and again through higher freight and supplier charges,” Trask reported. “That multiplier effect can raise total input costs even for operations that have already contracted or hedged part of their on-farm fuel requirements.”
The outlook for lower diesel prices doesn’t look good. On September 9, the Department of Energy raised its forecast for U.S. diesel prices in 2027 as tight global supplies keep domestic inventories unusually low.
The latest Energy Information Administration outlook expects retail diesel to average $4.40 a gallon in 2027, up 8.2% from its previous forecast of $4.07. EIA also raised its 2026 forecast 22 cents to $5.07 a gallon.
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