High diesel prices hit the Great Plains as midterms approach

Steve Kuiper, president of the Iowa Corn Growers Association, told Harvest Public Media that diesel prices were affecting those decisions, including how and when farmers moved crops and where they stored grain. In one example, a grower considered delivering more locally to avoid extra hauling costs.

An Iowa farmer told Brownfield Ag News he had not contracted fuel for fall work and expected the expense to weigh heavily on his operation. The report said diesel had doubled in price since his spring purchase.

The strain is not limited to field equipment. Southeast Missouri farmer Tory Meyr told Harvest Public Media that filling each of his three semis cost $1,500. He also said the diesel he bought for farm equipment cost 60% more than the prior year, before accounting for fuel he still expected to need to move harvested grain.

They also affect the choices available to truckers who move agricultural goods, though the reporting does not quantify a resulting change in consumer food prices.

What does the diesel order actually do?

President Donald Trump signed Executive Order 14435 on Oct. 5. It provides specified penalty relief for highway use of dyed diesel through Dec. 31 and directs the Treasury Department to determine whether certain tax payments can be deferred.

Dyed diesel is marked with red dye and is generally used for off-road work, including farm equipment. Farmers already had access to it for those uses. The order’s highway provision therefore focuses on whether some road users can use the fuel without facing the usual penalties.

The order does not immediately erase the federal diesel tax. The formal directive makes potential deferral subject to Treasury’s determination and applicable legal authority, and asks the department to explore eliminating the eventual repayment obligation. The Associated Press described the relevant federal tax on regular road diesel as 24 cents per gallon and reported that the order deferred it through year’s end.

That distinction matters to drivers and businesses deciding whether the measure will reduce their costs or postpone a bill. A deferred payment is not the same as a tax cancellation, and the order’s tax provision depends on Treasury’s action.

The practical value of dyed fuel also varies by user. The Associated Press reported that truckers could face different state rules and limited access to fueling infrastructure. Patrick De Haan, head of petroleum analysis at GasBuddy, said farmers already used dyed diesel for off-road work; industry voices also questioned how useful the highway provision would be for large trucking companies.

Matt Perdue, president of the North Dakota Farmers Union, said the measure would not offset the year-over-year increase in diesel costs. He also noted that many farmers had already completed much of their seasonal fuel use by the time the order was issued.

What other fuel proposals are on the table?

The administration has pursued more than one response. On Oct. 9, Trump announced an agreement for Russia to supply diesel in several shipments. The Associated Press reported that the announced plan included more than 300,000 tons, followed by 500,000 tons in November, 1 million tons immediately afterward and 3 million tons within a short period.

Those were announced shipment plans, not completed deliveries. The announcement tied the immediate concern over fuel prices to a broader dispute over U.S. policy toward Russia’s war against Ukraine. Ukrainian President Volodymyr Zelenskyy criticized the decision, the Associated Press reported.

Another proposal would restrict diesel exports in an effort to keep more fuel in the United States. Iowa Sen. Chuck Grassley has championed the idea as a way to increase domestic availability. But the American Petroleum Institute and economists cited by the Associated Press warned that an export restriction could instead raise prices for many Americans and disrupt supply chains.

The proposals reflect competing theories about how to bring down prices: alter taxes and fuel rules, increase supply through imports, or keep more U.S. fuel at home. None should be treated as a proven fix. Their costs and benefits depend on who can access the relief and how fuel markets respond.

What are voters weighing before the midterms?

CBS News reported that some Iowa voters are considering their options in the approaching midterms and described Republicans as having dominated Great Plains elections for a generation. That is a political backdrop, not evidence that voters will switch parties or that diesel prices will decide their choices.

The immediate economic pressures are more concrete. Farmers are adjusting hauling, storage and fuel decisions; truckers may encounter uneven access to the order’s provisions; and federal officials are considering tax deferral rather than an automatic tax cancellation.

The election is scheduled for Nov. 3. Before then, the practical questions are whether Treasury authorizes the tax deferrals described in the order, how much relief eligible road users can actually obtain, and whether the announced Russian shipments arrive.