Record Diesel Prices Strain California Farms and Trucking Firms
Diesel prices in California have risen to about $7.71 per gallon, driving up costs for farmers, small trucking companies and the broader supply chain, while larger firms are better able to absorb the shock.
Diesel prices in California have surged to roughly $7.71 a gallon, far above the national average of $5.85, according to the AAA motor club. The increase is hitting the state’s agricultural and trucking sectors hard. Farm owner Jay Mahil said his fuel expenses are up 40 percent from a year ago, forcing his operation to run with less oil in its tanks.
Greg Dubuque, general manager of a Montebello-based trucking fleet, reported that the cost to fill a truck rose from about $1,200 in April to $1,800 now. > “It’s a dramatic impact, especially for us smaller companies,” he said.
Port of Los Angeles executive director Gene Seroka noted that more than two-thirds of cargo moving through the port relies on trucks, and that over half of the 1,200 trucking firms using the port are small to medium-size businesses struggling with the price surge. > “It’s difficult for companies to absorb such an energy shock as we’ve seen over the past six months,” he said.
Supply-chain professor Nick Vyas said higher diesel costs are raising food-transport expenses, particularly for refrigerated goods, and that grocery prices are beginning to climb. He added that California’s higher taxes and environmental standards keep state diesel prices above the national level, affecting the broader U.S. supply chain because a large share of imports passes through California ports.
Larger carriers can hedge fuel purchases, but smaller operators like Dubuque’s 40-truck fleet must pay pump prices. Dubuque is trying to mitigate the impact by informing customers of higher costs, avoiding refueling in California when possible and using alternative fuels for overnight truck air-conditioning.
Economist Christopher Thornberg argued that, when adjusted for inflation, current diesel prices are not unprecedented, citing higher real-price peaks in 2008 and 2022. He suggested the overall U.S. economy is less vulnerable to fuel spikes than in past crises, though the record prices may have political implications ahead of upcoming elections.