Gasoline prices have been falling for weeks, but diesel and natural-gas prices remain much higher than a year ago --- raising costs for the nation’s...
Gasoline prices have been falling for weeks, but diesel and natural-gas prices remain much higher than a year ago — raising costs for the nation’s fuel-intensive agricultural industry and leading to expectations that food prices will remain high.
Kent Vander Lugt, a farmer in southwest Minnesota, says his fuel costs are 60% higher than a year ago, increasing his cost per acre of corn raised by $30 to $40. But while the average price per gallon of regular gasoline has dropped by nearly 22% in the past two months, to $3.917 on Aug. 16, diesel prices have seen a slower decline, down 13% since June 16 to $5.034, according to GasBuddy data. U.S. diesel prices peaked at $5.828 on June 21. Based on U.S. government data, diesel prices are still 46% higher than this time last year, says Covington.
Natural-gas prices NGU22 NG00 , meanwhile, trade 150% higher year to date, settling at $9.329 per million British thermal units on Aug. 16 — the highest since 2008. Natural gas is used in the production of fertilizer and as an energy source to dry grain to prevent spoilage.The past year’s natural-gas price rise is having “an inordinate impact on the cost of food production,” says Sal Gilbertie, president and chief investment officer at Teucrium Trading.
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