Minnesota diesel costs double as crop prices surge 27%

Diesel prices in Minnesota have climbed from $3.57 to $6.13 a gallon over the past year, a 72% increase that threatens to erase gains from a strong harvest. While crop values have risen sharply, the cost of running equipment has doubled, creating a tight margin for producers across the state.

The shift began in late February when the U.S.-Israeli war against Iran disrupted global supply chains. Fertilizer costs spiked almost immediately, raising fears that 2026 would mirror the unprofitable 2025 season. However, the conflict also triggered crop scarcity in other regions, pushing American prices higher.

Corn futures have risen approximately 18% since this time last year, and soybean prices have increased by about 27%. John Griffith, executive vice president at the CHS cooperative, attributed the price jump to global trade disruptions and attacks on Eastern European exports. He noted that these disruptions introduce fear into the marketplace, which manifests in higher prices.

On the ground, conditions vary by region. Megan Horsager, a 34-year-old farmer near Montevideo, reported that her 750 acres of sugar beets, soybeans, and alfalfa, along with 1,200 acres of corn, are ready for harvest. She described the field corn as dry and vibrant, stating, 'We’re feeling optimistic.'

Not all farms share that sentiment. In Mahnomen County, Pam Vipond reported that drought conditions caused her soybean yield to drop by half compared to last year. She noted that rain stopped around July 4, leaving some corn plants with no ears. The U.S. Department of Agriculture reported on Oct. 13 that 61% of Minnesota’s corn and soybean crops are in good or excellent condition.

The high fuel costs are a major concern for operations with heavy equipment usage. At Horsager’s farm, a combine consumes 26 gallons of diesel per hour. Her father, Marc Stevens, said the family filled their diesel reserves a month and a half ago to avoid the peak price. He believes the higher crop prices will cover the increased fuel expense.

Nathan Hulinsky, a University of Minnesota Extension educator, warned that many farmers pre-purchased diesel for harvest, but future contracts remain uncertain. He said, 'But then come springtime or next time the farmer needs to make a contract, who knows what diesel’s going to be?'

The USDA’s Economic Research Service forecasts total crop revenue to rise in 2026. However, government support for farmers is also projected to jump from $27.9 billion in 2025 to $47.4 billion in 2026. This increase is partly due to the Farmer Bridge Assistance program, introduced in 2025 to offset losses from the trade war with China.