By Jeff Caldwell

We’re heading toward mid-September in Iowa. The corn just north of my house started turning last week while the neighbors are getting their combines ready to roll this fall. It’s a time of optimism and hope.  

In a few weeks, bins will be filled up. And the grain markets have shown some new life lately. It’s the time of year when the angst of uncertainty turns to the excitement of seeing grain shooting from augers like a firehose. All while farmers ponder selling that grain to make ends meet.  

But that’s going to be tough this year. At the time of writing this, grain prices have rallied, but diesel costs $5.71/gallon at my local fuel retailers. That’s the highest price here. EVER. It’s uncharted territory and doesn’t pencil out well; fuel use data from the Iowa State University Extension Ag Decision Maker tells the story. And it’s one in which $5- to $6-corn and beans in the teens may not be enough to ease the pain.  

Running the combine’s going to cost about $2 to $2.50 more per acre for my corn and soybean farmer neighbors this fall. Hauling that grain is going to add at least another half-dollar just to get a mile down the road from the field. Compared to last year, add another 10 to 30 cents/mile after that. 

That’s the “on paper” data. Here’s the field view: Say you have a fairly late-model combine, two semi-trucks for hauling grain, and a grain cart to keep all the wheels turning. You’ll probably fuel up that combine and grain cart tractor once a day, and depending on where you’re sending grain, you’ll fill up your trucks every three to seven days. If you’re running a bigger combine, that’s about 400 gallons/day. At $5.71/gallon, that’s almost $2,300/day. Add another 200 gallons for your grain cart tractor and your fuel bill — before your crop leaves the field — is $3,400. Then, add in about another $2,000/week to keep your trucks fueled up.  

In my armchair wannabe economist math, that adds up to just shy of $25,000/week in fuel bills to get this year’s harvest in the bin. That hurts. Government payments and $6 corn will help. But not enough. It still means a lot of red ink.  

Everybody in our business needs to burn numbers like these into their minds. There are innumerable ways we can try to offset some — not all — of these losses with machinery, technology and strategic thinking. But it’s still going to be a tough fall.  

And that will mean some tight budgets after harvest, hard conversations with ag lenders and even tougher talks at the kitchen table over the winter and until the marketplace improves at the farm gate.  

Facing a squeeze like today’s diesel costs, it’s time to stop and make sure we are doing what’s right to row this boat in the same direction. To be able to write checks tomorrow, farmers may need to keep those pens in their pockets for a while. But knowing what they’ll write those checks for, when they’ll write them, and why will ultimately help us all — from CEOs to farmhands — make sure that when the cycle kicks back around, we’re still around.  

At Stratovation Group, we’re not the ones running the combine or writing huge fuel bill checks. But we are with you every step of the way, whether that means working alongside the groups advocating for you to lenders, regulators, and policymakers, or supporting the companies that help keep your equipment running, your grain moving, and your operation solvent through a tight winter. We know higher input costs test everyone in this business, not just the people in the cab. And we’ll keep doing our part so that when the cycle turns — as it always does — you’re ready to step back into the sunshine right alongside us. 

Stay safe out there this harvest season.