Farm Aid Rises as Diesel Prices Reach $6.28

Diesel climbed nearly 10 cents a gallon in the latest week, reaching an average of $6.28. The increase came even as President Donald Trump offered billions of dollars to farmers, relaxed rules for truckers and eased sanctions on Russian fuel before the November 3 elections. Farmers and truckers still face cost pressure, while the administration’s relief depends on public payments and temporary regulatory waivers.

Farmers Pay for Market Disruptions

“Trade disruptions and rising fuel costs tied to conflict abroad have put family farmers in a difficult position, and one-time payments can't provide the stability they need to plan for the future,” National Farmers Union President Rob Larew said. He called the proposed aid the second round of emergency assistance this year for losses that were largely foreseeable.

Trump announced $8 billion in new farm aid at a rally in Kansas on Monday. The payments would add to more than $47 billion already expected to go to farmers this year, including commodity payments and $12 billion in tariff relief distributed by the U.S. Department of Agriculture earlier in the year. If approved, the new program would bring total payments to a record $55.4 billion, surpassing the $45 billion record set in 2020, when farmers received pandemic assistance.

Payments can help farmers manage higher costs and lost sales, but they don't directly tackle the market disruptions driving fuel and fertilizer prices. They also raise questions about taxpayer spending to compensate producers for damage farm groups say is partly linked to the administration’s trade and foreign policies. The USDA couldn't immediately say how the latest aid would be allocated, when farmers would receive payments or whether Congress would need to approve it.

Higher fuel and fertilizer costs, trade disruptions and weak farm economics have fueled discontent among some of Trump’s core supporters in traditionally Republican Farm Belt states such as Iowa and Kansas. The policy response comes as nearly 80% of Americans blame Trump for higher costs, according to an October Reuters/Ipsos poll, while Republicans defend narrow congressional majorities.

A Waiver With Unclear Terms

An executive order this month let truckers use red-dyed diesel on highways, although the fuel is typically intended for off-road uses such as farm equipment. The order also temporarily waived certain federal tax reporting and record-keeping requirements. The Internal Revenue Service hasn't eliminated the federal diesel tax; it waived related reporting requirements and penalties through year-end.

That distinction has left truck stops and fuel sellers uncertain about how to apply the policy. David Fialkov, top lobbyist at NATSO, a trade group representing the largest U.S. truck stop operators, said members appreciate Trump’s effort, but the guidance remains “murky” and carries too much risk. “I really don't see any of these dyed diesel announcements making a meaningful dent in diesel prices,” Fialkov said.

The White House said “pre-existing issues,” including years of refinery closures and damage from Russia’s war in Ukraine, explain the high prices. White House spokeswoman Taylor Rogers said the president had taken “historic actions to save American farmers, truckers, and workers every hard-earned penny.”

Foreign Policy and Election Costs

Trump has also pressed European allies to release emergency fuel stocks, backing the demand with a threat to restrict U.S. diesel exports. The pressure has created diplomatic friction. Easing sanctions on Russian fuel carries another cost: those sanctions aimed to restrict Moscow’s energy revenues and its ability to finance its war in Ukraine.

Trump defended the relief as necessary to bring Russian President Vladimir Putin into negotiations to end the war and to release American prisoner Stephen Hubbard. Analysts said the Iran conflict has driven the diesel price spike far more, disrupting global oil flows and refined-fuel supplies; Ukrainian attacks on Russian refineries have tightened supplies but played a more limited role in prices.

Fuel-cost relief efforts haven't stopped prices from rising. Ahead of the November 3 elections, Trump has sought to shift blame toward Ukraine and President Volodymyr Zelenskiy rather than the Iran war. “I sort of see it as a blame-shifting kind of scapegoating operation, more than a genuine attempt to moderate prices in the lead-up to the election,” said Edward Fishman, director of the Maurice R. Greenberg Center at the Council on Foreign Relations. Chris Borick, a pollster and political scientist at Muhlenberg College in Pennsylvania, said he was skeptical that short-term gains would outweigh long-term losses.