With the midterm elections coming up soon, Donald Trump is trying to hold on to support from rural voters by floating an $8 billion dollar diesel fuel bailout for farmers, who have paid record high prices for fuel that keeps their tractors, harvest equipment and trucks operating. The USDA Economic Research Service projects that American farmers will spend nearly $5 billion more on fuel in 2026 than in 2025, which is adding another burden to production budgets that were already strained by input costs, financing expenses and uncertain commodity prices. Government payments to farmers were expected to exceed $47 billion this year, and diesel aid would bump that sum up to a record $55.4 billion. That’s about $10 billion higher than the $45 billion they received in 2020 for COVID relief. But producers may want to wait for the money to hit their bank accounts before spending it, because the US Department of Agriculture’s official position is that the timing of payments is still to be determined, and it’s likely that Farmers who produce commodities like soybeans, corn and rice will receive payments based on USDA models of average fuel expenditures, but the agency is also trying to find fuel cost data for other types of producers, including fishermen and produce farmers.
Mark Williams, master lecturer in finance at Boston University’s Questrom School of Business, points out that the proposed bailout doesn’t address the international energy disruptions that he believes are driving farmer’s costs higher, and that the $8 billion farm subsidy is a “mere drop in the bucket that fails to resolve the critical Strait of Hormuz choke point, that may leave global fuel costs, fertilizer prices, and projected inflation higher for longer,” He also contends that “Tossing a multi billion-dollar check to US farmers can’t solve this year's near-doubling of diesel prices or the skyrocketing cost of fertilizer.”
While the Four Corners has received more than abundant rainfall over the past couple of weeks,the lack of water flowing into the Lower Mississippi River and an ongoing regional drought, has left water levels on this major transportation route to the Port of New Orleans at risk of leaving barge traffic having to deal with low water levels again in the Mississippi for the fourth-straight fall. These low water levels may lead to restrictions on barge weight and their draft, that will limit how much grain can be transported downstream per barge. If this happens, the increased shipping costs are likely to lead to producers having to take lower prices for their grain.
Last week, I spent time visiting family and friends in Michigan and Illinois and riding along in combines and tractors while they were harvesting corn. The cabs on newer farm equipment are a good place to visit, because the nose is low and there are not many distractions. A couple of weeks ago I reported that Michigan and Ohio farmers were having problems due to crop damage caused by an exploding deer population, and that both states were allowing hunters to harvest several deer, rather than the usual one animal per hunter. I was surprised to find out that lately, the Michigan deer population was being dramatically reduced by an epidemic of Epizootic Hemorrhagic Disease that is being spread by a tiny midge commonly known as no see um. When the insect bites a deer to draw blood, the disease is often introduced into the deer’s blood stream, which causes high fever and mortality in many male deer. Another surprise was that the coyote population is becoming a very common problem in both states, where they were unheard of a decade or so ago.
Will Rogers wrote”All I know is just what I read in the papers.”
