Timely Topics
Four years ago, this column featured the impacts of Russia’s invasion of Ukraine on Rockbridge agriculture multiple times.
The geopolitical events that have been unfolding since March have had similar impacts but I have reserved comment due to numerous uncertainties around the issue, not least of which entail direct involvement of the United States in the conflict that is precipitating these market impacts. I want to be clear I do not intend to this column to offer political commentary. My intention here is to convey factbased information readers find informative and interesting.
Analysis by petroleum market experts summarized by journalists at The Economist in the April 30, 2026, issue strongly suggests petroleum prices are too low to reflect the ongoing supply impacts caused by the current crisis in the Persian Gulf.
The consensus of these experts is that from the date of the Strait of Hormuz being fully open to pre-war levels of traffic, the physical damage to export terminals and the complications of restarting pumping and refining operations in the Gulf countries will take two to five months to fully resolve.
These market experts suggest fuel prices will go much higher in the coming months. These prices have not gone higher yet, according to these experts, because of different countries releasing strategic oil reserves into their markets and because of reassurances by political leaders that the conflict will be quickly resolved.
What does this mean for agriculture in Rockbridge? The impacts take place on multiple levels but the two primary impacts are fuel and fertilizer costs. This week I focus on fuel costs.
An analysis of tractor operating costs reveals that for a 120-horsepower tractor, typical of many farm operations in Rockbridge, that with diesel fuel at prewar $4 per gallon, fuel and lubrication costs per hour run $25 per hour. With diesel fuel at $5.50 and $6.50 per gallon, these per hour petroleum costs jump to $35 and $41 per hour operation respectively. For a 75-horsepower tractor, the $15 per hour petroleum cost at $4 per gallon jumps to $21 and $25 per hour of operation for the $5.50 and $6.50 per gallon costs.
So, one farm operation over a 10-acre field that takes two hours and 30 minutes will cost an additional $20 at least, depending on size of the tractor and distance to travel to reach the field. H ay making, which entails a minimum of four trips over field (mowing, raking, baling, bale pick-up), will have well over $100 additional fuel cost on just 10 acres when accounting for machine size and transport to and from the field. Making such estimates is complicated by variation in horsepower requirements, distance traveled to the field, and the work being done.
Rockbridge cattle operations have been enjoying high cattle prices for the past two years. But ongoing drought concerns and increasing operational costs due to higher fuel and fertilizer prices are eroding the benefits that stockmen hope to capture from high cattle prices.
