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WASHINGTON, Sept 18: In northeast Missouri, Addie Yoder, a corn, soybean and cattle farmer, runs two combines, three semi-trucks and several tractors from mid-September to late October to harvest and transport her crops.<\/strong><\/p>\n With diesel \u200bprices at record highs and just one combine requiring 300 gallons of the fuel, the best she can do is try to curb other expenses, she said.<\/p>\n In southeast South \u200cDakota, Drew Peterson, a soybean, corn and cattle farmer, expects to spend as much as $1,500 per day to fuel just one of his combines this season, double last year\u2019s costs, among the many machines he must use to bring in his crop.<\/p>\n \u201cYou can\u2019t just say, well, diesel is expensive, I\u2019m not going to harvest,\u201d he said. \u201cYou\u2019ve just got to make it work in your budget.\u201d<\/p>\n Across the U.S., farmers are confronting record-high diesel prices during the height of harvest season, further squeezing already \u200bthin margins. Price hikes seem inevitable at America\u2019s grocery stores ahead of November\u2019s midterm elections, where cost of living is expected to be a primary voter concern.<\/p>\n Global fuel supplies have been squeezed \u200bby the U.S.-Israeli war on Iran and Ukrainian attacks on Russian refineries.<\/p>\n The average U.S. diesel price hit a new record this week, $6.29 per gallon, up 68% from $3.74 \u2060a year ago, according to Energy Information Administration data.<\/p>\n Higher diesel prices raise costs in every step of the food supply chain, from harvesting on farms to freight delivery that carries food to grocery stores, \u200bsaid David Ortega, an economist at Michigan State University.<\/p>\n \u201cThe majority of our food moves on trucks and those trucks use diesel,\u201d Ortega said.<\/p>\n Consumer food prices rose 2.7% year-on-year in August, according to the latest Consumer Price Index.<\/p>\n Farmers have access to off-road diesel, which is not subject to state and federal taxes. But even with the discount, many farmers are still paying significantly more for fuel than last year.<\/p>\n Wayne Gularte, who grows a variety of vegetables on roughly 600 acres near Gonzales, California, said his fuel costs have risen about 40%, from roughly $5 a gallon to $7 a gallon.<\/p>\n To save on costs, he has put some older gasoline-powered tractors from the 1950s back into service and parked one \u200bof the farm\u2019s diesel pickups. \u201cThe only money we can make is the money we save,\u201d Gularte said.<\/p>\n Farm fuel costs are up $11 per acre from last year for corn and $7 per acre for soybeans, according to \u200bMichael Langemeier, an economist at Purdue University.<\/p>\n Corn, soy and wheat futures all have rallied significantly since mid-August and hit multi-year highs in early September. Still, farmer margins remain thin compared to historical averages, said University of Illinois agricultural \u200ceconomist Nick Paulson, \u2060who warned high fuel prices could raise costs next year for seed and fertilizer.<\/p>\n \u201cThe concern is that $6-plus per gallon diesel is going to start to put some inflationary pressures on everything else, and even to some of that better profitability potential,\u201d he said.<\/p>\n Many farmers have already tightened their belts, leaving little margin to accommodate fuel price increases, said Jon Paul Driver, a hay farmer near Spokane, Washington, and second vice president of the Washington Farm Bureau.<\/p>\n \u201cAny increase in fuel right now is additional debt for the farm,\u201d Driver said.<\/p>\n U.S. Senator Roger Marshall, a Republican from Kansas, asked Agriculture Secretary Brooke Rollins in a September 11 letter to \u200bprovide temporary relief to farmers as they \u201cabsorb substantial \u200bunplanned fuel costs during one of the most \u2060diesel-intensive periods of the year.\u201d<\/p>\n A USDA spokesperson said the agency is \u201cnot leaving any stone unturned\u201d on high diesel prices and pointed to a September 15 NewsMax interview in which Rollins said she would have more to announce on the topic in the coming weeks.<\/p>\n Though fuel accounts for a small share \u200bof the cost of food, consumers could still see prices rise as the supply chain absorbs higher fuel costs over the coming months, Ortega said.<\/p>\n Those \u200beffects could take time to \u2060play out because retailers may attempt to absorb short-term price increases, or because freight contracts locked in at lower prices do not yet reflect fuel surcharges, Ortega said.<\/p>\n He added that some of the items most vulnerable to price hikes are grocery essentials like produce, dairy and meat that require fuel-intensive refrigerated trucking.<\/p>\n Rates to move apples and pears via refrigerated trailers out of Washington State\u2019s Yakima Valley have hit a four-year high with the harvest season \u2060only halfway \u200bover, said Dean Croke, principal analyst at DAT Freight & Analytics.<\/p>\n The cost to transport produce out of California is up 40% to \u200b120% from a year ago. In some California cities, diesel prices have topped $8 per gallon, Croke said.<\/p>\n Independent truckers, who typically pay for fuel up front, may not be able to withstand further hikes, Croke said.FUEL PRICES \u200bDOUBLING<\/strong><\/h3>\n
FOOD PRICES COULD RISE<\/strong><\/h3>\n
\u201cWe\u2019re about to see diesel price-driven bankruptcies\u201d of trucking \u200bfirms, he said.<\/p>\n<\/div>\n