Center for Agriculture and the Economy
Leveraging expertise from the Kansas City Fed, the Center provides timely analysis of industry developments and conducts ongoing research on the agricultural economy.
Fuel Costs Pressure Margins, but Mitigated by Higher Crop Prices
By Ty Kreitman
September 29, 2026
The recent surge in diesel prices has increased fuel costs for all types of farming operations, but the rise in expenses has also coincided with higher crop prices. Diesel accounts for most overall fuel costs for crop producers and prices in late September were over 75% higher than last year, representing a notable increase in costs alongside fall harvest. However, this amounts to only about $0.11 more per bushel in fuel costs for corn at national average yields, compared to a more than $0.80 increase in corn prices over the same period. Fuel costs for rice are notably higher and that same rise in diesel prices would increase per hundredweight cost by over $1.00, but rice prices have increased by nearly $4.00.
Note: The chart shows the per unit change in fuel costs and crop prices between September 2026 (month-to-date) and the 2025 average. The per unit costs are calculated by multiplying the national per acre fuel, lube, and electricity cost in 2025 by the percent increase in diesel from 2025 to September 2026 and dividing by the national average yield reported in the September WASDE.
Sources: USDA Cost and Return Estimates, EIA, Wall Street Journal, Barchart.com, and Federal Reserve Bank of Kansas City staff calculations
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Through regular surveys, analysis and connections across the industry, the Kansas City Fed has had a longstanding focus on U.S. and global agriculture. Leveraging this expertise, the Center for Agriculture and the Economy serves as a resource within the Federal Reserve System by providing timely analysis of industry developments and conducting ongoing research on the agricultural economy. The Kansas City Fed is committed to understanding developments in the agricultural economy and gathering perspectives from rural America in order to include them in discussions on the national economy.
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