Farm Costs Rise Due to Diesel Price Increase

By Blake Jackson

Insights shared by the University of Missouri Extension highlight how rising diesel prices are increasing pressure on farm production costs. As planting season begins, many farms begin the season with storage tanks filled with diesel purchased at prices below $3 per gallon during the winter. However, the first refill this spring may cost more than $1.50 per gallon higher than the previous delivery. This adds to existing concerns about rising fertilizer prices and overall farm expenses.

Rising fuel costs add to the pressure created by increasing fertilizer prices. The effect of higher fuel prices on a farm’s profits can be measured using an enterprise budget and may be less severe than many farmers expect, explains Drew Kientzy, a senior research analyst with University of Missouri Extension.

“For a fuel-intensive operating style that includes two passes with tillage tools, planting, two spray applications, harvesting, and trucking corn yielding 180 bushels per-acre, roughly 7.5 gallons of fuel are used per acre,” Kientzy said. “The per acre impact of the recent fuel price changes is $11.25 per acre higher than projections made in the fall, bringing total fuel costs from $21.75 to $33 per acre today.”

Fuel costs are only one part of machinery expenses. Other costs, such as repairs, depreciation, and interest, often make up a larger share of total equipment costs. Still, rising diesel prices continue to increase overall expenses and reduce profit margins for farmers.

“The 2026 Missouri corn budget estimates that fuel makes up 18% of total machinery costs and 5% of total production cost at today’s diesel price,” he said. “If a farm had all inputs except fuel locked in on Jan. 1, net returns to land decline from $120 per acre to $108 based on recent changes in fuel cost alone.”

Farmers can use budgeting tools to better understand these cost changes. Tools like crop budget spreadsheets allow users to adjust input prices and estimate machinery costs, helping them identify key cost drivers and improve planning.

“Producers are likely to face many more price changes before the crop is marketed, which is why we encourage farm operations to track their production costs to pinpoint their break-even while making marketing decisions,” said Kientzy.

Managing fuel costs and monitoring expenses remain essential for maintaining farm profitability. More information about the Missouri crop and livestock budgets.

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