MANHATTAN, KS – High diesel prices are increasingly being driven by tight refined-fuel supplies rather than crude oil alone, adding harvest and transportation costs for farmers. Kansas State University agricultural economist Greg Ibendahl says the refining margin now explains most of diesel’s rise since February.
U.S. retail diesel reached $5.97 per gallon on September 7, up $2.25 since February. Ibendahl estimates the refining margin contributed $1.71 of that increase, while crude oil accounted for 68 cents.
Global distillate supplies have tightened as refinery disruptions reduced output from Russia and the Middle East. EIA says U.S. diesel crack spreads are expected to exceed $2 per gallon from August through November as inventories remain historically low.
U.S. refineries are running hard, but strong exports and limited global refining capacity continue competing for available diesel. For a Kansas corn acre using four gallons, Ibendahl estimates the Midwest price increase adds about $9 per acre.
The EIA expects tight inventories and harvest demand to keep pressure on diesel into fall and winter, with meaningful relief partly dependent on recovering international refinery production.
Farm-Level Takeaway: Elevated refining margins mean diesel costs can remain high even if crude oil prices stabilize.
(Tags: Input Costs, Harvest, Transportation, Farm Income
Focus Keyphrase: diesel refining margins
Meta Description: Tight global refining capacity and elevated diesel margins are driving farm fuel costs higher even beyond the impact of expensive crude oil.