Farmers Struggle As Energy Crisis Consumes Their Wallets

By Daily Caller News Foundation (/journals/dcnf)

An energy crisis is squeezing American farmers — making it more expensive to operate their machinery, move their livestock and fertilize their fields.

The Iran war has disrupted global flows of crude oil, refined fuels and natural gas, driving up the cost of two key agricultural inputs: diesel and fertilizer. Farmers have limited ability to cut their use of either without potentially sacrificing yields or profits, an analyst told the Daily Caller News Foundation.

“Both the energy industry and the cultural industry are very low margins. Any increase in prices could be potentially devastating, especially in the smaller farms and refineries,” Chris Johnson, president of the American Energy Leadership Institute, told the DCNF.

The pressure can reach beyond the farm; energy prices can affect food prices by influencing the costs of processing, transporting and retailing food products, according to the U.S. Department of Agriculture.

The prospect of restricting U.S. diesel exports has also drawn concern from the refining industry and energy analysts. Republican Reps. Tim Burchett of Tennessee and Clay Fuller of Georgia introduced legislation in September that would temporarily prohibit diesel exports. A separate bill proposed by the same two lawmakers would trigger an export ban when average diesel prices remain above $5 per gallon for two weeks.

President Donald Trump also considered restricting diesel exports as his administration sought ways to bring down record fuel prices, though he said Oct. 2 that the U.S. would not impose a ban after G7 countries agreed to release emergency oil and diesel reserves.

“And so that’s why it’s both imperative that we get diesel prices down, but also why an export ban on diesel, like is being discussed by two members of Congress—I believe the President was talking about it this afternoon would be suicidal,” Johnson told the DCNF. “Because that just makes one low-margin industry slightly better off in a very short amount of time and heavily punishes the other small-margin industry, which is the downstream oil and gas refining industry.”

While restricting exports could temporarily leave more diesel in parts of the U.S., refiners could respond to the resulting surplus by cutting production, the Congressional Research Service found. Because refineries produce diesel alongside gasoline, jet fuel and other petroleum products, lower refinery runs could also reduce supplies of those fuels and potentially push their prices higher.

The American Petroleum Institute has similarly argued that Gulf Coast refineries produce more diesel than the region consumes and rely on exports to move the surplus. Blocking those exports could eventually fill available storage and force refiners to process less crude, reducing production of diesel as well as gasoline and jet fuel, according to the industry group.

“They’re not able to export any of it. They’re going to reduce production now because their demand is going to be destroyed by 25%,” Johnson continued. “We’re going to see long-term higher oil prices and higher diesel prices if we implement a policy.”

The Power Behind The Farm

Diesel is a major fuel used in American agriculture. Tractors, combines, harvesters and other heavy farm equipment depend on diesel to prepare fields, plant crops and bring in the harvest. Farms also rely on diesel-powered trucks to haul agricultural inputs such as seed and fertilizer to farms and transport grain, produce and livestock from farms to processors, storage facilities and markets.

Trump late Monday opened tax-free dyed diesel, normally reserved for farms and other off-road uses, to highway trucks as his administration looks for ways to ease record fuel costs. The executive order directs the Treasury Department to determine whether it can defer certain federal diesel excise tax payments incurred through Dec. 31 without interest or penalties, while exploring avenues to eliminate the deferred obligations entirely.

The administration expanded access to the fuel as diesel prices remain near historic highs, putting pressure on truckers, farmers and other industries that depend heavily on diesel. The White House has argued the move could save some truckers more than $100 per fill-up where states take corresponding action.

Industry groups have warned that dyed and clear diesel ultimately come from the same underlying fuel supply, meaning opening agricultural inventories to highway trucks may provide short-term flexibility without resolving the broader supply crunch that pushed prices higher.

The move could also create tension between two industries the administration is trying to help. Agricultural groups have raised concerns that allowing highway trucks to tap dyed-diesel inventories during harvest could tighten supplies available to farmers, even as the administration argues expanded access will lower transportation and supply-chain costs.

The national average diesel price reached a record $6.52 per gallon in October, up from roughly $3.72 shortly before the war began, according to the American Automobile Association (AAA). Global crude and refining disruptions tied to the conflict have strained diesel supplies as farmers head into harvest season.

The amount of fuel a farm needs varies by crop, equipment and field conditions. Iowa State University research estimates that common field operations can consume several gallons of diesel per acre when tillage, planting, spraying and harvesting are combined. Therefore, on a farm covering hundreds or thousands of acres, even a modest increase at the pump can add thousands of dollars to seasonal operating costs.

Fuel costs also follow livestock after it leaves the farm. Jackie Moore, owner of Joplin Regional Stockyards in Missouri, said the rate to haul cattle had climbed from $4.75 per mile to $5.75 per mile in a matter of weeks, according to Missouri-based Brownfield Ag News.

Shipping cattle roughly 1,000 miles from the eastern United States to Midwestern processing plants can add approximately $5,000 to the cost of a load, Moore told the outlet. Those costs cut into producers’ margins before beef ever reaches a supermarket.

The Iran and Ukraine wars had already helped push an index of major agricultural commodities up more than 13% in August, its largest monthly increase in 14 years. Rising diesel costs add another layer of pressure to food already moving through a strained supply chain.

‘Very Low-Margin’

The same conflict is placing pressure on fertilizer through two separate energy channels.

Natural gas transported through domestic pipelines could help shield American fertilizer production from some overseas supply disruptions, TC Energy spokesperson told the DCNF.

Natural gas is the principal feedstock used to make ammonia, the foundation for nitrogen fertilizers such as urea. When natural gas becomes scarce or expensive, fertilizer plants face higher production costs and may reduce output. The war eliminated roughly 36 million metric tons of liquefied natural gas (LNG) supply and sent Asian spot LNG benchmark prices from about $10 to nearly $30 per million British thermal units, according to Reuters.

TC Energy operates nearly 31,000 miles of pipeline across 36 states and delivers approximately one-quarter of the natural gas consumed in the United States each day, according to the company. Natural gas is an essential feedstock for producing ammonia, which is used to manufacture nitrogen fertilizers relied upon by American farmers.

Crude oil refining is tied to a different part of the fertilizer market. Refineries remove sulfur from petroleum products to meet fuel standards, producing elemental sulfur as a byproduct. That sulfur is converted into sulfuric acid, which is used to process phosphate rock into plant-available phosphate fertilizer.

“Sulfur, which is also a product of gas,” Johnson said. “The fertilizer itself has a lot of oil and gas inputs, but it’s less about the amount of each of those inputs that agriculture uses and more about the fact that both the energy industry and the agricultural industry are very low-margin.”

The result is a less obvious link between an oil-supply disruption and the nutrients farmers spread on their fields: reduced crude processing can mean less recovered sulfur, tightening the raw material used to manufacture some phosphate fertilizers.

“Unlike LNG shipped through global chokepoints, North American natural gas moves through domestic infrastructure that is largely insulated from overseas supply disruptions,” TC Energy told the DCNF.

The Iran war initially raised fears of a global fertilizer shortage as Gulf shipments collapsed. Urea imports from Gulf exporters fell 85%, while global urea prices rose 70% during the second quarter of 2026 compared with the previous year, according to the Financial Times.

China also restricted exports of several fertilizer products after the war began, further tightening a market already disrupted by the loss of Gulf shipments, Reuters reported.

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All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.