Temporary diesel tax relief may provide less savings than farmers might expect. The Internal Revenue Service will suspend enforcement related to highway use of red-dyed diesel through the end of the year, while penalties will also be waived. NDSU Assistant Professor of Agribusiness and Applied Economics Matthew Gammans estimates the savings for a 2,000-acre corn-soybean farm at only about $170 this fall. “I think that’s kind of disappointing in its magnitude.” The federal government has also announced a temporary deferment of the 24.4-cent-per-gallon federal diesel tax. Congressional action would be needed to permanently forgive those taxes. Gammans said even additional federal relief would cover only a small portion of higher fuel costs. USDA estimates farm fuel expenses increased 29 percent in 2026 from a year earlier.
