Joe Hamilton farms corn and soybeans on 2,500 acres in Indiana’s Delaware county. Next week, when his soybean harvest kicks off, four tractors, two combine harvesters and five semi-trucks will roar to life. And with that, a record bill for about 9,000 gallons of diesel awaits him.
With diesel-guzzling combine machines now entering fields across the eastern corn belt for the beginning of the soybean harvest, crop growers, trucking companies and a host of other industries that rely on the fuel are dealing with record-high prices. An estimated 20bn bushels of soybeans and corn (522m metric tons) are set to be harvested in the midwest between now and the end of November. Estimates suggest that the war with Iran, damaged refineries in Russia and regional diesel supply disruptions could add an additional $12,500 in fuel costs for every 1,000 acres of crops harvested.
It’s not just fuel – it’s chemicals, it’s seed, it’s the cost of equipment,” laments Hamilton. Four of the five states with the highest weekly diesel price increases in the country in September were in the midwest (Illinois, Michigan, Ohio and Indiana), with the fuel jumping by more than $3 per gallon compared with a year ago. On top of the war on Iran, regional issues are playing a role.
A power outage and flooding last month at an ExxonMobil refinery in Joliet, Illinois, saw it shut down for more than a week, taking more than 80m gallons of diesel and gas offline. An ongoing six-month dispute between union members and BP at one of the largest refineries in the country in Whiting, Indiana, has also fueled a surge in prices regionally. If you have water access you can bring tankers in with additional oil,” says Kurt Lykins, a lecturer at Otterbein University.
Although the prices for gasoline and diesel have been rising, drawing down from the reserve has given some stability to prices,” he says. We’re getting ready to go into a high diesel demand season in winter.” Amid the rising prices, large consumers of diesel fuel across the region are moving to reduce expenses where they can. In Ohio, 15,000 school buses that overwhelmingly run on diesel are charged with getting about 800,000 grade school students to and from their homes every school day.
The Columbus school district, already facing a potential $157m financial deficit by 2031, has recently had to cut nearly 300 jobs, close four schools and limit bussing for students. The diesel issue, say administrators at the largest public school system in the state, is front of mind. I expect there will be transportation changes to the system in the next budget.” Almost 40% of school districts that participated in a national survey published in May say they are consolidating bus routes to help reduce diesel fuel expenses.
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