High diesel prices continue to squeeze California farmers’ profit margins, adding to financial stress and forcing some to scale back field work, delay equipment maintenance and postpone purchases, according to a California Farm Bureau survey.
More than half of respondents said current diesel prices threaten the long-term viability of their farms, while 57.6% said savings from being able to use red-dyed diesel on public roads would help keep their operations financially viable.
The issue has gained urgency following an Oct. 5 executive order by President Trump to temporarily allow red-dyed diesel to be used on public highways and defer the 24.4-cent-per-gallon federal diesel excise tax on that fuel through Dec. 31.
However, state law still prohibits dyed diesel on public roads, preventing California farmers and ranchers from fully benefiting from Trump’s order. California Farm Bureau has urged state lawmakers and Gov. Gavin Newsom to provide relief. If California suspends its 48-cent-per-gallon diesel excise tax and allows dyed diesel on roads, farmers could save about 73 cents per gallon on fuel used in farm trucks and other on-road vehicles.
Farm Bureau’s survey findings cover more than 1,000 responses received from Oct. 7-10. Of those, 81.3% said high diesel prices have reduced their profit margins. More than 73% reported increased financial stress, and nearly 43% said fuel costs have increased food production costs.
The findings underscore how fuel expenses affect farmers’ ability to manage day-to-day operations and invest in their businesses.
“Farmers and ranchers are sending a clear message: Diesel prices matter,” California Farm Bureau President Shannon Douglass said. “Diesel powers the equipment that plants, irrigates, harvests and transports our food. These survey results show the financial pressure fuel costs are placing on family farms across California. Farmers won’t survive if something doesn’t change.”
The survey comes as farmers continue to face higher expenses for other essential inputs, including water, fertilizer and labor.
For some producers, rising fuel costs have already led to fewer field operations. More than 40% of respondents said they had reduced field work because of diesel prices, while nearly 31% reported cutting operating hours.
One producer said fuel expenses were forcing reductions in irrigation and water conservation measures, highlighting how higher costs can affect decisions beyond equipment use.
Farmers are also putting off investments and maintenance. Nearly 39% of respondents said they had delayed equipment maintenance, and nearly 36% had deferred equipment purchases. Another 24% reported reducing hiring.
“We have to sell property because we can no longer afford to pay for fuel for the equipment,” one respondent said. “With all the rising costs, we are months away from foreclosure.”
The survey also asked farmers how much they could save if diesel prices were 73 cents per gallon lower, based on their fuel use during September and October. Responses varied according to fuel consumption, with some operations reporting potential savings of hundreds or thousands of dollars per week.
More than 40% of respondents said between 76% and 100% of the diesel they purchased was used on the farm, underscoring the importance of fuel to agricultural operations.
Farm Bureau asked respondents what they would do with savings from being able to use red-dyed diesel on public roads. The most common response, selected by nearly 58%, was that the savings would help keep their farms financially viable.
Nearly half said they would use the savings to offset rising input costs, while 36.5% would pay down operating debt and 36.6% would invest in equipment repairs and maintenance.
About 50% said they would complete additional field work. Others would use the savings to improve roads, fences or other infrastructure; improve irrigation or water delivery; or hire employees or increase work hours.
Farm Bureau said the survey, which can be completed at www.surveymonkey.com/r/VZX7G77, is intended to provide policymakers with information about the effects of diesel prices on California farms and ranches.
Source: California Farm Bureau.
