Harvest fuel costs are soaring, threatening farm profits and adding pressure to grocery prices. An energy analyst warns Russian diesel shipments may arrive too late to provide meaningful relief before the November 3 elections.
DETROIT — Michigan farmers harvesting corn and soybeans face nearly $1,200 in additional costs every time they fill the 330-gallon diesel tank of a large combine, compared with fuel prices at the beginning of the year. Rising expenses are squeezing farm profits and could eventually reach consumers through higher food transportation and grocery costs.
President Donald Trump says his October 9 agreement with Russian President Vladimir Putin will lower diesel prices. But energy analysts question whether the shipments are large enough, or can arrive quickly enough, to provide meaningful relief.
With the November 3 midterm elections approaching, the timing raises another question: Will Michigan farmers see savings during harvest, or will any economic benefits arrive after voters go to the polls — if they materialize at all?
Michigan Combine Costs Nearly $2,000 To Fill
A John Deere X9 combine, used to harvest corn and soybeans, carries approximately 330 gallons of diesel.
According to Michigan Farm Bureau’s fuel-price tracker, Michigan off-road agricultural diesel cost $2.32 per gallon January 3 and $5.95 per gallon for September 21 delivery.
330-gallon combine fill-up Cost January: $2.32 per gallon $766 September: $5.95 per gallon $1,964 Additional cost per fill-up $1,198
Agricultural diesel differs from highway diesel in its tax treatment. The comparison covers January through September, not exclusively the period since the Iran war began.
Fuel expenses multiply across tractors, grain carts and other harvesting equipment.
Tuscola County farmer Dave Rupprecht told Michigan Public that rising diesel expenses are reducing expected earnings from corn and soybeans. Michigan Farm Bureau’s Teresa Sissung said some farms need fuel deliveries nearly every day.
Michigan Farm Bureau and 19 agricultural organizations have requested temporary relief from Gov. Gretchen Whitmer.
Higher Farm Costs Can Reach Grocery Stores
Diesel expenses continue after harvest.
Trucks move grain to processors, livestock to markets and finished food products to warehouses and grocery stores. Refrigerated transportation adds expenses for meat, dairy and produce.
Higher fuel costs can lead to freight surcharges and more expensive distribution contracts.
Farmers, processors, trucking companies and retailers may absorb some increases through lower profits. Others may pass part of the costs to customers.
As Associated Press reporting explains, rising diesel expenses add inflationary pressure through transportation and food distribution.
Food prices also depend on labor, crop supplies, weather and consumer demand. Nevertheless, sustained fuel increases can eventually contribute to higher grocery bills.
Analyst Questions Timing Of Russian Diesel Shipments
Ashley Kelty, an energy analyst at investment bank Panmure Liberum, told The Guardian October 11 that the initial Russian diesel shipment is too small to significantly affect prices.
Kelty also identified a logistical obstacle: Russia must charter vessels, load the fuel and transport it to the United States, a process that could take approximately three weeks.
That would leave little time for substantial savings to reach American farmers and consumers before November 3.
Kelty also warned that multinational companies could face complications involving Russian-origin petroleum and sanctions imposed by other countries.
Michael Lynch of the nonpartisan Energy Policy Research Foundation offered another concern in an Associated Press report.
Russian diesel redirected to American customers may simply leave existing buyers searching for replacement supplies elsewhere. That would do little to increase worldwide availability.
These assessments address the agreement’s likely economic impact, not Trump’s political intentions.
What Trump And Putin Agreed To
Trump announced October 9 that Russia would immediately supply more than 300,000 metric tons of diesel to American and global markets, followed by 500,000 tons in November and additional shipments afterward.
Trump says increasing supplies will help farmers, truckers and consumers. Treasury Secretary Scott Bessent defended the arrangement as a way to reduce fuel costs.
The Treasury Department temporarily eased certain sanctions on Russian diesel transactions.
The agreement comes amid the Iran war and disruptions to shipping through the Strait of Hormuz, which have constrained global petroleum supplies and driven up fuel prices.
The U.S. Energy Information Administration monitors how international supply disruptions affect petroleum markets.
Analysts caution that relatively small Russian shipments may not offset the much larger Middle Eastern disruption.
Republicans Divided Over Putin Agreement
The arrangement has drawn opposition from members of Trump’s own party.
Republican Sen. Thom Tillis questioned whether easing restrictions conflicts with sanctions legislation. Republican Reps. Brian Fitzpatrick and Don Bacon have also opposed steps that could weaken pressure on Moscow.
Their concern is that petroleum sales could benefit Russian exporters while the war in Ukraine continues.
Other Republicans support expanding fuel supplies to reduce American energy costs. Sen. John Barrasso has defended Trump’s approach, while Bessent maintains the administration has legal authority to proceed.
Reuters reported the Republican disagreement October 11.
Ukrainian President Volodymyr Zelenskyy has also criticized the agreement, warning that easing restrictions could weaken pressure on Russia to end the war.
Will Michigan Farmers See Relief Before Harvest Ends?
For Michigan agriculture, the costs are immediate.
A large combine can cost nearly $2,000 to fill at recently reported agricultural diesel prices. Farmers also face higher expenses for tractors, crop transportation and processing.
Trump’s agreement could add diesel to tight markets, and the administration argues that additional supplies will benefit consumers.
But Kelty’s shipping estimate and other analysts’ concerns about limited additional supply leave substantial uncertainty about relief before Election Day.
For Michigan farmers, the test is whether fuel prices fall while the harvest is underway. For consumers, it is whether lower diesel costs eventually reduce pressure on grocery bills.
