|
RCBJ-Audible (Listen For Free)
 |
Diesel Prices Are At An All-time High, And Empire State Farmers Are Feeling The Pain
By David Carlucci
How Bad Is It?
Their situation was already precarious. In 2025, New York lost farms at double the national average rate and farmland five times faster. For many farm families struggling to stay afloat, the price of diesel can be the difference between turning a modest profit and going into foreclosure.
A recent Joint Economic Committee report quantifies the impact of high diesel prices on our agricultural sector. At the peak of the 2026 spring planting season, a typical New York farmer paid an extra $1,500 each time they refilled their fuel storage tank. That farmer would also have shelled out an additional $200 per fill-up for a grain truck and $240 for a tractor.
Diesel prices have risen significantly since then, and the fuel-intensive work of harvest is already underway.
What’s Causing High Diesel Prices?
The most obvious explanation is the ongoing conflict with Iran. U.S. naval escorts had begun to loosen Iran’s grip on oil shipments through the Strait of Hormuz, but the recent Houthi offensive along the Red Sea has spooked markets once again by threatening Saudi oil shipments.
Saudi Arabia’s East-West pipeline, its main route around the Strait of Hormuz, was also shut down after a drone attack earlier this month, leaving the kingdom struggling to export oil. It has reportedly told European refineries to expect zero crude in October, suggesting that both families who rely on heating oil and the global oil market are in for a rough winter.
The other explanation, which doesn’t generate nearly as many headlines, is the ongoing war between Russia and Ukraine.
Ukrainian drone strikes have pushed Russia’s oil refining to its lowest levels in more than two decades, triggering fuel shortages, price spikes, and long lines at gas stations across Russia. One strike on the Moscow Oil Refinery this summer blanketed the southern half of the city in black smoke. Russia has responded by banning diesel exports since July, and it is reportedly set to extend that ban beyond the end of September, placing even more upward pressure on global prices.
How Not to Help Farmers
Sen. Chuck Grassley (R-IA) recently suggested that we emulate Russia. “[W]hy doesn’t Pres[ident] Trump put an embargo on diesel exports like presidents in the 70s put embargoes on ag products bc food prices were inflated[?]” he wrote on X this month. “High diesel prices ARE KILLING FARMERS INCOME.”
An export embargo might deliver some short-term relief, but a quick glance at the precedent Grassley cited shows just how bad an idea it would be. When Nixon placed an embargo on soybean exports in 1973, it permanently diminished American dominance. Japan invested heavily in building up Brazil’s soybean industry, and European countries used subsidies to increase domestic output.
Cutting off diesel exports would be similarly disastrous. International buyers would lose faith in America and seek out other sellers. U.S. refiners would have to cut output, since they produce more diesel than we consume and lack the capacity to store the excess. And global prices would rise even higher, hurting states like New York that often import fuel from abroad because of the difficulty and expense of shipping domestic fuel from the Gulf Coast. In other words, an embargo meant to help farmers could actually raise prices here at home.
Throwing Lifelines
Fortunately, New York farmers have also gotten a few pieces of good news lately.
One is the July settlement John Deere reached with the Federal Trade Commission and five states. The agreement follows a February win in which the EPA, responding to a request from Deere, confirmed that federal emissions law does not stand in the way of farmers repairing their own equipment. Under the settlement, for the next ten years, farmers and independent repair shops will have access to the same diagnostic software and repair tools the company’s own dealers use. Between this settlement and a prior right to repair agreement Deere made with the America Farm Bureau Federation three years earlier, the company has set a model for the rest of the industry to follow in respecting consumer rights.
It might cost a farmer an arm and a leg to fill up a tractor, but at least it won’t have to sit idle all day waiting for a dealer technician. Even if a farmer decides not to fix the problem themselves, competition among independent repair businesses will drive down prices, offering some relief from the rising cost of inputs like diesel and fertilizer. Hopefully other companies soon come tosimilar right-to-repair agreements.
And then there’s President Trump’s oil deal with Venezuela, which he described as the biggest in history. As part of the deal, North American Blue Energy Partners has agreed to invest $100 billion in new Venezuelan oil infrastructure, take over fields previously held by Russian and Chinese firms, and guarantee the U.S. the right to purchase a share of the output. The best way to deal with supply shocks is to increase supply, and that is what this agreement aims to do.
It won’t provide any relief this season, and analysts caution it could take years to pay off. But if New York farmers can hang on until the wars in Iran and Ukraine end and new supply comes online, they might find themselves in a better position than they were before the conflicts started.
David Carlucci consults organizations on navigating government and securing funding. He served for ten years in the New York Senate.
