Record Diesel Prices Strain US Agriculture and Logistics

U.S. diesel prices reached a record national average of approximately $6.53 per gallon on September 23, representing an increase of up to 86% since January 1. The surge is attributed to low inventories and geopolitical conflicts involving Iran, Russia, and Ukraine, including Ukrainian attacks on Russian diesel production. In California, prices peaked at $8.42 per gallon, prompting truckers in Nevada and Arizona to seek alternative routes to avoid the state.

Donald Trump, President of the United States, announced support for temporarily restricting U.S. diesel exports to lower domestic prices, a move Treasury Secretary Scott Bessent is currently evaluating. The price spike has created severe operational strain for farmers in Western New York, Iowa, Nebraska, and Ohio as the fall harvest begins. Many farmers report they cannot pass these input costs to consumers, forcing them to absorb the financial burden or delay equipment repairs.

Logistics companies and non-profits are also struggling. Some small trucking firms in Missouri have already shut down, while food banks in Georgia and Missouri are depleting operational reserves to cover fuel costs. Experts warn that these transportation expenses will likely filter through to store shelves, particularly for fresh produce and meat, though a lag time typically exists before consumer prices rise. In Canada, diesel prices in southern Ontario have nearly doubled year-over-year, though Metrolinx and Via Rail Canada have maintained passenger fares through fixed-supply arrangements and close monitoring.