The U.S. retail diesel price averaged $6.35 per gallon on October 27, a nominal record in more than 30 years, and specialists warn it could stabilize at between $6 and $7 per gallon as the new normal.
The U.S. retail diesel price averaged $6.35 per gallon according to the October 27 update from the Energy Information Administration (EIA), the highest nominal value in more than 30 years of records. Over the past year, the price rose $2.63 per gallon, and specialists warn that elevated values could persist.
Gregg Ibendahl, a farm management specialist with K-State Research and Extension, closely follows the diesel market. He noted that an average Kansas farm spent around $31,000 on diesel in 2025 and estimates that this year the expense will approach $50,000, so he warns that higher diesel costs could become the new normal.
Ibendahl explained that the $2.63-per-gallon jump over the past year comes down to one issue: there isn't enough diesel production. The EIA reported that supplies are tight because of reduced refining in Russia, China and the Middle East, where conflicts cause delays in production or transportation, particularly due to Ukrainian drone strikes against Russian refineries.
"That has really caused Russia, which normally is one of the world's biggest diesel exporters, not to be able to ship out very much diesel. So those factors have really conspired to give us a situation where there's just not enough diesel fuel in the world to go around," Ibendahl said.
Even in the best-case scenario, with fuel passage moving freely through the Strait of Hormuz and an agreement between Ukraine and Russia to end the war, Ibendahl estimated it would take about a year before prices could return to pre-war levels.
But if the strait remains contested and the war between Russia and Ukraine continues, he said: "Then, I think between $6 and $7 could be the new normal going forward. In fact, I would not be a bit surprised if the $2 differential we're seeing between gasoline and diesel doesn't really go away."
Meanwhile, the United States produces a significant amount of diesel: distillate production is at a seven-year high of 5.1 million barrels per day, and refineries are running at 97% of capacity, according to the EIA.
"We're limited in our refinery capacity. There are too many hurdles to jump through. Even if we started today, it would probably take 10 years to get approval to get one in place," Ibendahl said.
Around 30% of U.S. diesel is exported to Europe, according to Ibendahl, and with the ongoing conflicts, the United States is now the world's largest diesel exporter. Although in September it was reported that President Donald Trump's administration had a plan to ban diesel exports, Ibendahl noted that diesel is a globally traded commodity.
The specialist predicted that a ban might work for one or two months. "But at that point we would start accumulating a bunch of diesel in the United States and we would have to stop refining everything. And, after a couple of months, you would start to see the gasoline price go up, in addition to the diesel price starting to go back up," he added.
Recently, the U.S. Department of Agriculture (USDA) announced it will make $8 billion available in one-time payments to American farmers during this harvest season to provide relief from temporary market disruptions and rising input costs.
Jason Schwantz, senior vice president of energy sales at CHS, noted that geopolitical issues are a key factor in the tightening of supplies, but that the industry also faced several turnarounds this year, when refineries shut down for improvements or maintenance. The refining supply chain is easily affected by global conflicts and domestic demand, and much of the fuel moves through pipelines. In addition, stockpiling is difficult, because diesel fuel varieties are not intended to be stored for more than six months to a year.
CHS is the nation's largest cooperative and works with farmers, other cooperatives and many parts of the agricultural sector. Schwantz sees the tight supply firsthand. "When you get this level of tightness, it's hard to recover, and then you come into a big ag season," he said, adding that fall harvest and tillage are the "Super Bowl of farming," the time of peak diesel use.
Even knowing the main factors driving diesel, prices keep fluctuating, and uncertainty complicates things even for economists. "World events are really hard to predict and to determine when they're going to happen. We can do our best forecasting when we have the idea that there isn't going to be too much upheaval in the world. It just makes forecasting very, very difficult," Ibendahl said.
Advance planning is key. Ibendahl said farmers need to make sure they have guaranteed supplies on the farm when they need them. Schwantz agreed that the best thing is to budget and plan ahead.
"Anything you can do to plan ahead and make sure you stay a step ahead is always, always going to help a farmer. Sometimes buying in the offseason, if you can, is one of the best times to buy in terms of price and, frankly, supply," Schwantz recommended.
In addition to his work at CHS, Schwantz farms 280 acres of corn and soybeans in Minnesota. He noted that CHS and other cooperatives often offer forward contracts as an option.
"Diesel is an input, but it's probably not the main input farmers think about. They think about seed, fertilizer and agricultural chemicals. I always say don't forget about your fuel needs, because that one tends to get pushed to the background, and you don't want to get into these problems and not be able to get fuel to get your product off the field," he concluded.
