John Boyd Jr., a farmer in southwest Virginia, recently paid around $1,000 to fill up his tractor. Boyd, who represents the fourth generation of his farming family, manages a farm with soybeans, corn, wheat, and beef cattle.
Boyd reports that diesel now costs about $7 per gallon. This is nearly double what he paid last year. The national diesel average has surpassed $6.51 per gallon, as noted by AAA. This cost increase is one economic impact resulting from the ongoing conflict involving Iran. The previous diesel price record of approximately $5.85 per gallon was broken at the start of September.
Boyd described the situation as a crisis for farmers across the nation during an interview with NPR’s Morning Edition. Adjusting his expenses has been challenging for Boyd. Lacking on-farm diesel storage, he transports diesel from suppliers, which adds logistical challenges and costs. He employs creative financing strategies by reallocating funds from other farm operations to account for these fuel expenses.
Corn prices are hovering around $5 per bushel, and Boyd still covers the fuel costs needed for harvesting. This financial strain compounds existing pressures faced by farmers. Boyd highlighted that over 400 Black farmers risk losing their farms and need financial support. He indicated that many of these farmers supported the current president but now feel abandoned by the administration.
The spike in diesel prices stems from a more extensive global fuel supply squeeze. This issue escalated after the United States and Israel launched an attack on Iran on February 28. Resulting disruptions in oil transit through the Middle East, especially the Strait of Hormuz, have increased crude prices. Consequently, reduced diesel supplies from the region have tightened fuel markets not only in the United States but also in Europe and Asia.