... Record prices are one thing, but getting your hands on enough diesel may be the next issue for farmers...
Diesel Prices Just Hit a New Record High, Here's Why a Diesel Shortage May Be Next
By Tyne Morgan, FarmJournal's Pork
May 10, 2022
Farmers are already faced with a shortage of equipment parts, tires and some crop inputs. Now, due to increased demand and a drop in production, a diesel shortage may be next as the largest diesel distribution hub in the U.S. is sitting on supplies at a 30-year low.
Diesel prices hit a record again this week. The national average price of diesel is now $5.54 per gallon, which is an increase of 22 cents from last week, which was when the most recent record was set. Data shows there's no state that's currently seeing diesel prices below $5.12 per gallon.
So, what's causing the historic run-up in prices?
It's a combination of things, but Russia, supply chain trying to play catch-up and lower production along the East Coast are all adding to the dire supply situation.
"Diesel supply is short all over the world due to sanctions against Russian oil and much higher post-pandemic demand as supply restocking takes place," says Peter Meyer with S&P Global Commodity Insights.
Meyer adds the "just in time" supply chain model only exacerbates the problem as the supply chain works through issues that date back to the Covid-19 pandemic.
Some farmers are now even reporting farm diesel prices are higher than on-road diesel, which is typically not the case.
Record prices are one thing, but getting your hands on enough diesel may be the next issue for farmers...
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