Diesel price spike increases financial stress for farmers

By Manola Secaira

California diesel prices skyrocketed in September, adding another layer of stress for farmers and truck fleet owners who depend on the fuel for daily work.

According to AAA, California’s average diesel price on Oct. 1 was more than $8 a gallon, up sharply from $5.16 a year ago. California’s average price represents the highest in the nation, about $2 more than the current national average of about $6.

Experts attribute the price spike in part to continued disruptions to shipping through the Strait of Hormuz amid the U.S.-Israeli war with Iran. Ships transiting through the Middle Eastern waterway normally carry about one-fifth of the world’s petroleum, making disruptions there a significant risk to global energy supplies. 

Diesel and gas prices have dramatically increased since the war began in February. Other global stressors, including Ukraine’s attacks on Russian refineries, also play a part.

Ryan Cummings, an economist with the Stanford Institute for Economic Policy Research, said California’s taxes and fees are among the factors driving the state’s higher price. He also pointed to broader global market pressures that are pushing up diesel costs nationwide.

California has historically supplied most of its own gas and diesel, but refinery closures in recent years have led the state to import more from other countries. Even so, Cummings said gas and diesel prices are largely set by the global market, making the impact of in-state refinery closures on current diesel prices negligible.

“There’s some transportation costs, but those are pretty small,” he said. “Whether a refinery opens here or a refinery closes here, as long as you have free trade, it’s the global market that’s going to dictate the price rather than the local production.”

Cummings said this dynamic is why the Trump administration is considering a diesel export ban, even as some warn the policy could eventually push up prices at the pump. 

“That cuts off the competition for those barrels from the rest of the world,” he said.

For farmers, the use of diesel is often unavoidable. 

Yolo County farmer Bill Cruickshank, who serves as chairman of the California Wheat Commission, said he and other wheat growers already felt the sting of rising diesel prices when they harvested their crop earlier this year. 

With the recent price surge, he said wheat farmers are seeing their fuel costs increase by about 6% overall. 

Jeromy Geiger, a Glenn County farmer and co-owner of an agricultural trucking business, said diesel powers all his farm equipment—from tractors to pump engines. His trucking business is entirely dependent on diesel to keep its fleet running.

He said he raised the seasonal rate this year on his trucking customers to account for higher diesel costs but is trying to avoid changing them again in the middle of the season. 

“We’d like to hope that we don’t adjust immediately and that we’ve factored enough to where we can weather the storm and not hammer our customers, who are all farmers,” he said. “Our trucking business is built entirely on agriculture, so we feel the pain of the farmer as well.”

Geiger said he considered adding electric vehicles to his fleet to reduce his reliance on diesel. He contacted Pacific Gas & Electric Co. three or four years ago about installing a charging station in his truck yard. But he said the company told him it wasn’t feasible because the necessary energy infrastructure wasn’t available in the rural area where he works and lives. As a result, he has continued to rely on diesel.

“For some people, it makes total sense, and it’s totally doable,” Geiger said. “But it can’t work for everybody.”

Colusa County farmer Chris Torres, who also owns an agricultural trucking business, said he faces similar challenges as diesel prices soar. He said fuel is a major expense across his 400 acres of rice, from powering harvesters and tractors to managing rice straw after harvest. Overall, he estimated his fuel costs have gone up by at least 50%.

“It’s all expensive,” Torres said.

With his trucking business, he said he has already had to increase the fuel surcharge for customers. In the past, he adjusted the surcharge seasonally, but rising prices may force him to update it weekly. He said he hopes to avoid daily adjustments but acknowledged the cost of fuel has increased considerably.

Cummings, the Stanford economist, said an end to the war in Iran and a resumption of regular oil shipments would likely bring prices down. But without knowing when those conditions will return, he said it’s hard to predict when diesel prices will fall. 

He said global inventories of crude oil and refined products were well-stocked before the war but have steadily declined since it began. The longer the conflict continues, the greater the risk that fuel prices could reach levels that make the current increase seem mild in comparison, he added. 

Even if the war ended tomorrow, Cummings said, it would take time for fuel prices to ease, as refineries would need time to process crude oil and replenish depleted inventories.

If all of the inventories are gone, then there’s an acute physical scarcity, which is going to take weeks to get sorted out,” he said. 

For growers, Cruickshank said the price of wheat has climbed due to reduced exports from Russia and Ukraine amid their ongoing conflict. But he said farmers have few options for cutting costs in response to the higher diesel prices because many already operate on tight margins.

He said he hopes disruptions to oil shipments end soon, particularly because he doesn’t expect assistance from state officials. 

Torres said he hopes profits from last year’s crop will be enough to cover the loans needed to plant this year’s crop. Beyond that, he said it’s hard to plan for what comes next.

“Volatility is extremely challenging,” he said. “There’s not much we can do.” 

Manola Secaira is a staff writer for Ag Alert. She can be reached at msecaira@cfbf.com.

Reprint with credit to California Farm Bureau. For image use, email agalert@cfbf.com.

In this edition…

• View full issue
• 2026 Voter Guide
• Advocacy in Action: Legislation, diesel and wolves
• Roadless Rule has kept forests from being managed
• Farm Bureau team seeks solutions in D.C.
• Diesel price spike increases financial stress for farmers
• New date crop hits market as fruit goes 'mainstream'
• From the Fields: Ray Yeung, Yolo County farmer
• From the Fields: Joe Zanger, San Benito County farmer
• From the Fields: Blake Wilbur, Tulare County farmer
• From the Fields: Paul Vermeulen, Stanislaus County almond grower and huller
• Vineyards turn to UV-C light to fight powdery mildew
• Pumpkin growers target trends, Halloween demand
• Calls open for Agricultural Educator of the Year award
• How to effectively manage stored grain fire risks