MURFREESBORO, Tenn. – Farmers work with notoriously tight profit margins and the high cost of fuel for their equipment is another budget tier they need to think about this planting season.
About 20% of the world’s daily oil supply passes through the Strait of Hormuz off the coast of Iran. In retaliation for US strikes in the Middle East, the Iranian regime has threatened to attack any ship crossing the strait.
Impasse means higher gas prices worldwide, including the United States
Farmers are preparing for the spring planting season, one of the times of year when they are most dependent on energy. Will Hutchinson, a Middle Tennessee farmer, said the timing of the Iran conflict couldn’t be worse.
CARGO STRIKED IN STRAIT OF HORMUZ AMID IRAN CONFLICT
About 20% of the world’s oil supply passes through the Strait of Hormuz, off the coast of Iran. The Iranian regime threatens to attack any ship that crosses the strait without authorization. (FOX/Fox News)
“With the timing of recent events right here, during the planting season, it caught us a little off guard,” Hutchinson said.
Hutchinson burns approximately 500 gallons of diesel fuel every day during the planting season. On an average fall harvest day, it uses about 1,500 gallons of diesel and 5,000 gallons of liquefied petroleum gas (LPG).
Many farmers try to make do with what they already have in stock. Hutchinson holds 20,000 gallons of diesel in two metal tanks on his property. It stores 6,000 pounds of LPG just steps away.
“If we don’t come to a resolution in the next few months, we will burn through the margin we have here,” Hutchinson said.
Will Hutchinson stores 20,000 gallons of diesel and 6,000 gallons of liquefied petroleum on his farm in Murfreesboro, Tennessee. (FOX/Fox News)
As of Wednesday, the national average for a gallon of diesel fuel was $4.83. The price jumped more than a dollar in less than a month.
Iran threatens $200 barrels of oil as US prepares massive release of emergency oil reserves
Nick Ewen, senior editorial director of The Points Guy, said gas prices could continue to rise for several weeks even after the Iranian conflict ends.
“The big question is how far they could go, and we just don’t know. It depends on how long the conflict lasts and how long the bottleneck in the Strait of Hormuz lasts,” Ewen said. “Ultimately, anyone who tries to fill up their car or truck at the gas pump is definitely going to have difficulty for, probably, several more weeks.”
Many farmers have no choice but to continue spending on diesel as the planting season approaches. Farmers hope for an end to high gas prices caused by the Iranian conflict. (FOX/Fox News)
Hutchinson said budgeting for high fuel prices extends beyond the tractors he operates in the field. It pays for the fuel used at all levels of the supply chain.
“We’re pressed on the fuel front for, you know, field operations, and it’s also up to us to get our products to market. Every step of that process has to include diesel fuel,” Hutchinson said. “It’s about looking at it from two different angles: the manufacturing cost and the transport cost.”
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In 2023, crude oil accounted for more than 75% of U.S. oil imports, according to the Energy Information Administration. The United States exported more than 4 million barrels of its own crude oil that same year.
“If anything, it really highlights the need to, you know, have as much energy independence as possible,” Hutchinson said. “If we can produce that much energy in this country, it will help cushion the blow in times like these.”