The U.S. Department of Agriculture (USDA) announced $8 billion in one-time farm payments as diesel prices rose, with aid based on modeled crop losses rather than each farmer’s fuel bill.
The U.S. on-highway diesel average reached $6.276 per gallon for the week of Oct. 19, up 9.7 cents after two weekly declines, the U.S. Energy Information Administration (EIA) reported. Its series includes taxes. The White House’s Oct. 5 order cited restricted global diesel supply, while G7 leaders pointed to Iran’s disruption of trade and energy security. Reuters reported that analysts saw the Iran conflict as the larger driver of the price spike.
USDA announced its Harvest Fuel Relief program on Oct. 19. For the 2026 crop year, the agency plans to use acreage reports and estimates of production costs, yields and crop prices to calculate modeled losses, then cover only part of those losses. USDA has not announced an application period, and rates for Title I commodities are due in November.
USDA said it had sent $12 billion to more than 560,000 farmers through Farmer Bridge Assistance in 2026. Two weeks before the new program’s announcement, the agency had also made nearly $14 billion in gross Agriculture Risk Coverage and Price Loss Coverage payments. Reuters, citing USDA official Richard Fordyce, reported that farm payments were already expected to exceed $47 billion in 2026. It said the new aid would bring the total to $55.4 billion, above the previous high of $45 billion in 2020, and reported that payments are expected after the Nov. 3 election, with the exact timing undecided.
An Oct. 5 executive order directed the Treasury Department to consider deferring certain federal diesel excise-tax payments. The order described penalty relief beginning Oct. 5, while the Internal Revenue Service (IRS) says its relief for highway use of red-dyed diesel applies retroactively from Oct. 1 through Dec. 31. The relief covers federal penalties and does not change state fuel taxes or penalties. The IRS expects to issue further guidance on tax-payment deferrals.
On Oct. 9, the Treasury Department’s Office of Foreign Assets Control authorized specified transactions involving Russian-origin diesel, including U.S. imports, through 12:01 a.m. ET (04:01 UTC) on April 7, 2027. G7 leaders also committed to a coordinated release of 100 million barrels of oil and products over four months, including substantial diesel volumes within the first 20 days, while reaffirming sanctions against Russia.
David Fialkov, a lobbyist for NATSO, a group representing truck-stop operators, told Reuters: “I really don’t see any of these dyed diesel announcements making a meaningful dent in diesel prices.” The EIA’s next diesel-price update is scheduled for Oct. 27.
