Diesel prices are hitting farmers worldwide

Global diesel prices have risen sharply amid supply cuts due to the situation in the Strait of Hormuz and attacks on Russian refineries. In Australia, farmers' fuel expenses have increased by more than 50% compared to last year. Because of this, agricultural producers need an above-average harvest just to cover costs, while many farms have only a week's worth of fuel supply with a harvesting campaign lasting several weeks.

Similar problems are being recorded in South America, Europe, and the USA. In Brazil, producers are warning of potential delays to sowing due to a diesel shortage, with prices in the region having risen by about 40% since the start of the war between the US and Iran. In the USA, fuel costs have reached record highs, prompting authorities to take measures to reduce expenses, including the signing of an executive order to ease restrictions on diesel taxation. Such expenses heavily impact farm profitability: for example, in Louisiana, farmers spend tens of thousands of dollars just to refuel machinery.

In addition to fuel, agricultural producers are facing the consequences of El Niño and rising costs for other inputs, such as fertilizer and electricity. Food inflation is already accelerating, and major agricultural associations are warning that the persistence of high fuel and material prices could lead to a drop in food production volumes.