DELAWARE - A sharp rise in fuel prices linked to the ongoing war with Iran is straining American farmers, who said soaring diesel costs are cutting into already thin margins as the planting season begins.
According to AAA, the national average for diesel fuel has climbed to $5.375 per gallon, up from $3.757 just one month ago, an increase of more than $1.60. Regular gasoline has also surged, rising to $3.98 from $2.98 over the same period. The recent spike brings diesel prices closer to their record high of $5.816 set in June 2022.
At Magee Farms, Chris Magee said the increase is hitting at the worst possible time.
“As we start to head out to the field, we’re buying diesel, and it’s almost $6,” Magee said. “You look at last year, we were paying $2 and $3. Stuff’s almost doubled.”
Unlike other industries, farmers said they often cannot pass those higher costs on to buyers.
“We’re price takers. We don’t get to set the price,” he said. “How you absorb that is yet to be understood.”
Grain prices remain dictated by global markets and large corporate buyers, like the Chicago Board of Trade, leaving little room for negotiation.
“If we go to the chicken companies and said we need $5 to break even, they’re going to said, 'We’ll buy it for $4',” Magee said. “We don’t really have a choice.”
To offset rising expenses, many farmers are expanding on their operations. At Magee Farms, that includes growing corn, soybeans and vegetables, raising livestock, and running a landscaping business.
“The farmer is the ultimate diversifier,” Magee said. “You just hope that one will balance the other.”
However, just like having to drive far for work, needing fuel is unavoidable.
“There’s a certain amount that it’s just the way it is,” he said. “It’s part of life.”
The speed of the recent price increases has also raised concerns.
“A shipment of fuel from Iran takes 30 days, but the price went up in five days,” Magee said. “It just makes you wonder who’s getting paid — because it’s not the American farmer.”
Farmers said the higher fuel costs will likely ripple through the broader economy, especially in food prices, as transportation becomes more expensive.
“Everything has to go up, and that’s very hard to swallow.”
For now, farmers said they are pressing forward despite the uncertainty.