KSU Study on the Impacts of Rising Energy Prices on Farmers and Ranchers

A new surge in oil prices will hit farmers right in the bottom line. New estimates suggest a $90-per-barrel market, which could significantly raise production costs across the board. Kansas State University economist Gregg Ibendahl said higher oil prices are already creating a ripple effect through key farm inputs like diesel fuel and fertilizer. “$90 oil would add more than a dollar per gallon to the fuel costs, and that could easily mean another $10,000 per year in total fuel expenses,” he said. “The average Kansas grain farm spent about $20,000 on fuel last year, and that means even a moderate increase can hit budgets hard.” Fertilizer prices are just as big a concern because they’re closely tied to the energy markets. The study showed rising oil prices could push fertilizer expenses up by ten percent. For the average grain farm, that translates into roughly $12,000 in additional costs. 

U.S. Farmers Planting Less Corn and More Soybeans

The latest USDA Prospective Plantings Report shows farmers are planting three percent less corn compared to last year. Producers in South Dakota, Nebraska, Iowa, and Minnesota will lead the rest of the country in fewer corn acres. South Dakota’s area will fall by 550,000 acres to 6.3 million, the biggest decline in any of the top corn-producing states. The Ag Department said corn acres in Nebraska, Iowa, and Wisconsin will each fall by about 450,000 acres. Soybeans in the U.S. will replace at least some of the corn acres, increasing by four percent compared to 2025. Iowa will see the biggest rise in soybean acres, up by 450,000 over last year. Wisconsin will jump by 370,000 acres, and Nebraska will plant an additional 350,000. Wheat area is likely to shrink by three percent compared to 2025. If accurate, that would be the smallest planted area since recordkeeping began in 1919. 

Illinois Reaches Important B20 Milestone

Clean Fuels Alliance America applauded Illinois for moving to a B20 biodiesel blend requirement, a major milestone that strengthens the state’s leadership in expanding the use of cleaner, domestically-produced biofuels. Effective April 1, the minimum biodiesel blend required to qualify for Illinois’ state sales tax exemption increases from B17 to B20. That represents the final phase of landmark bipartisan legislation passed in 2022. The policy exempts qualifying biodiesel blends from the state’s 6.25 percent sales tax, creating a powerful market incentive to drive adoption. “Illinois has created a model that supports farmers, strengthens fuel markets, and improves air quality all at the same time,” said Jeff Earl, the director of state governmental affairs for Clean Fuels. The biodiesel industry generates $3.2 billion in annual economic activity in Illinois and supports 8,100 jobs across the state. “This is a win for rural communities, the environment, and energy security too,” Earl added. 

MOU Launches Grazing Action Plan

Public lands ranchers joined Ag Secretary Brooke Rollins and Interior Secretary Doug Burgum as the secretaries signed a memorandum of understanding launching their Grazing Action Plan. Leaders and members of the National Cattlemen’s Beef Association and the Public Lands Council participated in a roundtable discussing cooperative work to address longstanding challenges for federal lands grazing permittees. “By speeding up the permitting process and expanding the use of targeted grazing, the federal government is ensuring that more ranchers will keep ranching and that rangelands will face less depredation and destruction from wildfires and mismanagement,” said Tim Canterbury, President of the Public Lands Council. The Grazing Action Plan focuses on boosting rancher resiliency by assessing vacant allotments, unifying permitting frameworks between agencies, expanding the use of targeted grazing to prevent wildfires, and establishing a rancher liaison program for wildfire incident command centers. 

Applications are Open for the Ag Innovation Challenge

The American Farm Bureau, in partnership with Farm Credit, is accepting applications for the 2027 Farm Bureau Ag Innovation Challenge through June 5. Now in its 13th year, this national business competition showcases U.S. startup companies developing innovative solutions to challenges faced by American farmers, ranchers, and rural communities. The overall winner of the competition will get $100,000 in startup funds, the runner-up will receive $25,000, and two additional business owners who advance to the final four round will each get $10,000. “Encouraging innovation is essential to keeping American agriculture strong,” said AFBF President Zippy Duvall. “If you’re building a business that can help farmers and rural communities thrive, don’t wait. Apply today.” After the application period closes on June 5, ten semifinalist teams will be selected and announced on September 2. Next, the ten teams will pitch virtually to compete for a spot in the final four round of the contest. 

Bill Would Expand Access to Mental Healthcare for Farmers

In honor of National Ag Day, legislators introduced the bipartisan Agriculture Access to Addiction and Mental Healthcare Act. The bill aims to improve access to mental health and addiction services for farmers and ranchers in rural communities. Wisconsin Congressman Derrick Van Orden, one of the cosponsors, says farmers and ranchers are the nation’s backbone, working tirelessly to feed and fuel America. “This legislation takes an important step toward understanding the gaps in access to mental health and addiction care for our agricultural communities,” Van Orden said. Congressman Joe Neguse (neh-GOOSE) of Colorado said this legislation takes an important first step towards bridging access and care gaps and ensuring that rural America has access to essential healthcare services. “Our farmers, ranchers, and producers are essential to the nation’s food security,” Neguse said, “and we must make sure we’re supporting them with access to healthcare for them and their families.” 

Thursday Watch List

Markets

USDA will release their Weekly Grain Export Sales report Thursday morning at 7:30 a.m. CDT. At the same time, the U.S. Census Bureau will release U.S. trade balance details for February. Of course, traders will also be following the conflict in the Middle East for new developments.

Weather

A storm system in the Plains continues to move northeast through the Midwest on Thursday. Widespread showers and thunderstorms will continue to develop with the system. Some areas of heavy rain and severe weather will be possible. Cold temperatures across the north are causing some snow and freezing rain to accumulate as well. A second storm system is moving through the Pacific Northwest and will continue to push eastward into the Canadian Prairies and Northern Plains with additional showers and some areas of heavier snow as well.