President Donald Trump announced Monday night he will send $8 billion in relief to row crop farmers to offset the price of diesel.
The announcement comes even as his plan to buy Russian diesel and further soften sanctions against Moscow is up against mounting bipartisan pushback.
While on the midterm campaign trail in Kansas, the President said USDA would provide one-time payments to farmers squeezed by soaring diesel prices. USDA will tap into Commodity Credit Corporation funds for the newly announced Harvest Fuel Relief (HFR) Program, which will be similar to the Farmer Bridge Assistance (FBA) program.
The announcement comes as part of a broader, multifaceted effort to lower fuel prices ahead of the mid-term elections, as diesel remains persistently high and could serve as a pinch point for voters. On Friday, Trump waived new sanctions on Russia that were due to go into effect under the Graham Act he signed in September, attempting to allow more product into the global market.
The average national price of diesel on Monday was at $6.32 per gallon, according to AAA, down just over 20 cents from the record high of $6.53 set on September 22.
Record Diesel Prices a Big Hit at Harvest
Despite all the political efforts by the administration to lower prices for farmers, they’ve seen little relief during the peak of harvest.
For farmers, filling up their trucks and farm equipment has been more expensive this fall, with prices nearly $3 above last fall and even the end of 2025.
Gregg Ibendahl, Extension farm management and ag finance specialist at Kansas State University, says farmers’ fuel bills have essentially doubled. “The fuel bill last year for Kansas when fuel prices were a lot lower was about $31,000, and diesel prices. So you know probably close to being double that,” he explains.
Matt McCarthy, who farms near Newell, Iowa, says the record diesel fuel prices have driven up the cost to harvest the crop: “To get it out of the field I would say probably about $10 an acre, $10, $12 an acre probably.”
The bigger hit is coming to transport the crop to market according to Kevin Scott, who farms near Valley Springs, South Dakota. He says, “It’s our truckers hauling it from a terminal or from the farm to a terminal. That is really expensive. When you get five to seven miles to the gallon and you have $6 diesel to put in it, it really jacks up our price.”
$8 Billion Relief Expected by November
To combat these costs, the Harvest Fuel Relief program will use a uniform formula to cover part of modeled losses during the 2026 crop year. Calculations will include FSA planted area, and early estimates look promising.
“Just kind of a rough, very, very rough, you know, back of the envelope calculation. If you take that $8 billion divided over 270 million crop acres, that’s potentially about $30 an acre or so,” says Ibendahl. “Again, it’s going to be different by crop, but that’s just applying it consistently across all the crops.”
FSA is expected to provide per acre and crop calculations by November.
Sen. Roger Marshall (R-Kan.) notes that global conflicts have severely impacted the market. “This war going on in Ukraine, the war going on in Iran, have impacted diesel fuel. They came up with a number of $8 billion, and I know that the FSA will be working day and night to get those monies out as quickly as possible,” Marshall says.
The $8 billion will make a big difference in net farm income, especially when added to the $14 billion of ARC and PLC payments coming out in October.
“It certainly wasn’t for those extra ad hoc payments here, you know, it’d be a whole different situation for farmers with their amount of net farm income,” Ibendahl says. “This is making a big difference. It’s helping farmers get through this kind of period of high input prices.”
The payments will also help farmers store grain longer to wait for better prices. Jon Scheve of Scheve Grain adds, “No one likes these prices, nobody wants to sell sub-$13 beans and certainly no one wants to sell sub-$5 corn... so yes, these payments are going to go a long ways to helping bridge financial issues for the farmers and that should then in turn post-harvest help prices go back higher.”
The one group left out of the relief package is cattle and hog farmers. Ibendahl notes, “We have to remember, livestock producers, you know, they also use a lot of diesel fuel to get their animals back and forth.”
Buying Diesel from Russia is Wrong
While farmers desperately want relief on diesel prices, many say buying product from Russia is politically motivated ahead of the midterms and will have little impact on lowering prices. That includes Dave Poppens, who farms near Lennox, South Dakota.
“I think it’s a political move,” Poppens explains. “Some of it we were hearing earlier was that the U.S. was exporting a lot of diesel because of the price. So why didn’t we just keep our own diesel? To me they’re letting the oil companies keep the profit and working out something politically that way. We’re the guys at the bottom here just trying to get by.”
Colton, South Dakota, farmer Jeff Thompson says dropping the economic sanctions on Moscow is just plain wrong.
“That’s not a good idea. You know, it’s like that’s just helping Russia and we just need to end that problem and you know, it’s just a lot of talk that’s not going to go anywhere.”
Dyed Diesel Exemption a Bust
The President also recently signed an executive order to allow dyed diesel in over the road vehicles, but that only provides minimal savings for farmers according to David Iverson of Astoria, South Dakota.
“So, typically it can cost $400 or $500 to fill up your semi or more depending how big the tanks are and you know it’ll be $50 savings from that,” Iverson says.
In Iowa, the state exemption doesn’t apply to trucks used to haul livestock, and so McCarthy has chosen not to use dyed diesel in his trucks. Plus, he has concerns about possible fines after the order expires.
“What happens if we get our tanks dipped by the DOT in April and that truck hasn’t done anything or it got parked with a half a tank of dyed fuel? I mean, we don’t know those answers,” he remarks.
Currently the 24.4 cent federal tax exemption on dyed diesel used in over the road vehicles is only being deferred until the end of the year. Farm groups, like the American Soybean Association, have asked for the tax to be waived completely, but farmers don’t have any assurances.
That’s why Scott didn’t make the changeover either. “We’re still going to fill up the truck with road fuel. Because I just don’t want to deal with that part of it. I don’t want to keep track of all those gallons and I have multiple people driving trucks.”
No Quick Fix
Beyond temporary financial relief and tax exemptions, Senator Marshall points out that none of this helps fix the root of the problem, which is diesel refining capacity.
“The big issue to me on diesel is refineries,” Marshall says. “That all our refineries are at maximum capacity, and that therefore we’re dependent upon diesel imports. We’ve not built a new refinery since 1978.” Marshall stresses that a longer-term fix or investment is critical.
And, while farmer McCarthy appreciates the administration’s overall efforts, he agrees there’s no quick fix to the diesel supply crunch and near record prices.
“So, yeah, I’d like to see diesel down,” McCarthy says. “It doesn’t have to be at $2, but we need to be balanced, and we’re not balanced today. I think our president’s trying to do the best he can with it, but I don’t think it’s something that you just fix overnight.”
