Along with the rest of the nation, Oklahomans are seeing high prices at the pump as the war in Iran rattles fuel supplies.
Yesterday's average price for gas in the state reached $4.04 a gallon while diesel costs soared to $5.93, according to AAA. Shawn Steward, public affairs manager for AAA Oklahoma, said the diesel price is a record high in the state, but gas has not broken its record of $4.66 a gallon in the state.
The price of diesel is up 81% from a year ago, he said.
"So definitely those prices are impacting a variety of businesses, farmers, anybody who operates vehicles and machinery that uses diesel fuel," Steward said.
Brent Rendel grows up to 6,000 acres of winter wheat, soybeans, corn and sorghum on his Ottawa County farm; he is also chairman of Oklahoma Soybean Board. Like other farmers, Rendel is paying more to fill up trucks, tractors and any other fuel-reliant equipment to manage all those crops.
Although he can buy diesel and store it, that doesn't mean much.
"We've got a storage tank, and it holds, you know, we'll get 4 or 5,000 gallons at a time, and that sounds like a large number, but it's really not," Rendel said. "When you consider that a combine during harvest can easily use over 200 gallons in a day, it doesn't last very long when harvest arrives."
The high fuel prices are hitting at the wrong time for producers. Drought and extreme heat are gripping the state, hurting crops and causing many ranchers to haul water.
Moreover, it's almost time to harvest soybeans in Oklahoma, and Rendel plants about half his farms' acres with the legume. Compared to this time last year, he said he's seeing a 25% increase in fuel costs.
He said there are steps he can take to cut back on costs. Rendel has implemented no-till on his farm, reducing how often he uses equipment and to conserve water, and he can also cut down on fertilizer.
But he needs to harvest his soybeans and that requires a combine relying on fuel.
"It's not like I can harvest fewer acres," Rendel said.
Travis Roach, professor of economics at University of Central Oklahoma, said because diesel is used up and down the whole supply chain, this supply shock will raise input costs on goods.
He said the U.S. uses about 143 million gallons of diesel per day.
"So this $2 add-on increase due to the Iran war effectively means that now we're spending about $300 million per day extra on diesel," Roach said. "And so that has to come from somewhere. It comes from profitability or it gets put into prices, which means it comes from our pocketbooks."
Roach said this will show up in future inflation numbers as the extra cost is tacked on to consumer prices. How long it will last, he said, depends on how much the U.S. stays in the way and how much physical capacity has been damaged.
Even if the war ends soon, Roach said fuel can't begin to flow immediately. It will take months to get back to what was normal before the war.
But some countries have responded to this by shifting to electric, and Roach said some consumers might be considering electric vehicles more seriously. Some consumers might cut back on spending.
"You restrict your own spending because your own personal economy is a little less certain. And if everyone's doing that all at the same time, then that's some recessionary pressure," Roach said.
This report was produced by the Oklahoma Public Media Exchange, a collaboration of public media organizations. Help support collaborative journalism by donating at the link at the top of this webpage.
