Record Diesel Rides Every Cane Truck, and Louisiana's Relief Ends Oct. 22

Staff @ LT&C

4 minutes ago

5 min read

A combine loads cut cane into a wagon near Houma. (Lance Cheung/USDA)

KEY POINTS

Louisiana's average retail diesel price hit a record $6.03 a gallon, per the governor's Sept. 22 executive order; WWL-TV reported about $6.50, and the EIA's Gulf Coast average was $5.819 on Oct. 5. Sources disagree on the exact price.
The state order waives the dyed-diesel penalty for Class 2 and Class 5 trucks through Oct. 22, but the Department of Revenue still requires the 20-cent state excise tax to be paid, so the fuel is not "tax-free."
The state waiver ends Oct. 22, but the harvest runs about three months and an Oct. 5 White House order calls for federal penalty relief through Dec. 31. Growers also face a truck-driver shortage that the agriculture commissioner blames on the federal H-2B visa cap.

BATON ROUGE. Louisiana diesel reached an all-time high of $6.03 a gallon in late September, more than double the $2.85 the LSU AgCenter assumed in its 2026 crop budgets.¹ For the sugar industry, four weeks into a harvest that moves almost entirely by truck, that gap comes out of growers' margins, and the main state relief expires Oct. 22.^1,11

Gov. Jeff Landry signed Executive Order JML 26-090 on Sept. 22, declaring a statewide emergency over diesel supply. From Sept. 23 through Oct. 22, unless the governor ends or changes it sooner, the order suspends the state penalty for running dyed diesel, the red off-road fuel farmers and loggers keep in on-farm tanks, in highway vehicles registered as Class 2 (forest products) or Class 5 (farm use). That penalty is normally $10 a gallon or $1,000, whichever is greater. Letting stored fuel into highway trucks, the order says, "will make fuel immediately available to those operations."¹

Some coverage described the change as letting farmers burn tax-free diesel in their trucks. That overstates it. The Louisiana Department of Revenue's updated bulletin, RIB 26-018 dated Sept. 24, says relief for the vehicle operator "is available only if the operator or the person selling the dyed diesel fuel pays the Louisiana excise tax of 20 cents per gallon." It also limits the waiver to Class 2 and Class 5 operators and those who sell to them, narrower than a Sept. 23 version that covered "any person" selling or using dyed diesel on the highway.^2,3 The state is waiving a penalty, not its fuel tax.

Sources also disagree on what diesel costs. The executive order and the governor's office put the statewide average at $6.03, more than 80% above a year earlier, and The Advocate described it on Sept. 24 as slightly more than $6.^1,4,6 A Sept. 30 WWL-TV report, republished by Louisiana Farm Bureau News, said diesel was "hovering around $6.50 per gallon, up about $3 from this time last year."⁷ The federal benchmark is lower and falling: the Energy Information Administration's Gulf Coast on-highway average, taxes included, was $5.819 for the week of Oct. 5, down from $6.177 on Sept. 21 but $2.455 above a year earlier.⁸ The figures cover different dates and measures; none is definitive.

The order also names a cause. Citing EIA data, it says U.S. distillate exports hit 1,935,000 barrels a day in the week ending Aug. 7, the highest weekly level since the series began in 2010, while national inventories in mid-September were the lowest the agency had recorded for that week.¹

The American Sugar Cane League values the state relief at more than $8 million. "For Louisiana's sugarcane farmers, this order could mean over $8 million in savings over the course of the 2026 harvest season," general manager Jim Simon said the day the order took effect.⁵ The Advocate reported his estimate as around $8 million.⁴ The League says the industry had an economic impact of about $4.3 billion in 2023 and supports nearly 17,000 jobs; a more conservative 2024 LSU AgCenter analysis puts total impact above $2.3 billion.^9,10

Growers say fuel works its way into every ton. "It just gets cost-prohibitive to run these trucks. I mean, it's just so expensive," Maurice farmer Bryan Simon told The Advocate. "The sugar mill harvests and transports our crop, but our cost per ton is based on all the costs of actually harvesting."⁴ LSU AgCenter economist Michael Deliberto said tighter balance sheets delay equipment purchases. "When they delay the purchase of new machinery, they're probably going to have higher repair costs than they would normally have in a year," he said.⁴ For dealers, lenders and parts suppliers in cane country, that is the second-order effect to watch.

The field news is better. Agriculture Commissioner Mike Strain told the Louisiana Radio Network this week that the harvest is going smoothly. "The sugar's been coming in very well; harvest has been coming in very well. The price is stabilizing, so it looks very good and very bright now," he said. According to the League, all but one of the state's eleven mills are operating.¹¹

The tighter constraint may be drivers. Strain said the federal cap on H-2B visas has left the industry short of truck drivers. "Of course, those jobs are offered to Americans first, but we can't get the drivers in because of some bureaucratic issues dealing with new rules that are in place," he said.¹¹

Washington has moved on fuel. An Oct. 5 presidential order directs Treasury, within five days, to have the IRS announce it will not impose federal dyed-diesel penalties for highway use from Oct. 5 through Dec. 31, and to determine whether certain federal diesel excise taxes can be deferred.¹² LT&C had not located that IRS announcement as of Thursday night. WWL described a three-month harvest, and the state waiver ends Oct. 22.^7,1 Unless the governor extends his order, the state penalty returns while federal relief, if implemented, still runs.

For the cane belt, the next two weeks turn on whether Baton Rouge matches Washington's Dec. 31 date, what Treasury's guidance covers, and whether the EIA price, due next on Oct. 14, keeps easing.⁸

Sources

Office of the Governor, Executive Order No. JML 26-090, "State of Emergency: Agriculture and Forestry Diesel Fuel Supply," signed Sept. 22, 2026 (effective Sept. 23). Louisiana Division of Administration: https://www.doa.la.gov/media/ap2f0ei2/jml-26-090-state-of-emergency-agriculture-and-forestry-diesel-fuel-supply.docx (listed at https://www.doa.la.gov/doa/osr/executive-orders/)
Louisiana Department of Revenue, Revenue Information Bulletin No. 26-018 (updated), Sept. 24, 2026: https://dam.ldr.la.gov/lawspolicies/9.24.29%20Updated%20RIB%2026%20018.pdf
Louisiana Department of Revenue, Revenue Information Bulletin No. 26-018 (original), Sept. 23, 2026: https://dam.ldr.la.gov/lawspolicies/RIB%2026%20018%20Waiver%20of%20Dyed%20Diesel%20Penalty%20Final_Excise.pdf
Joanna Brown, "Louisiana farmers face soaring fuel costs as harvest nears. A diesel tax break could save $8M.," The Advocate, Sept. 24, 2026: https://www.theadvocate.com/acadiana/news/louisiana-farmers-rising-diesel-costs/article_bce7853e-cb68-4288-9cf5-b8aa83401aa3.html
Louisiana Farm Bureau News, "Sugarcane Farmers Thank Governor Landry for Diesel Relief During Harvest," Sept. 23, 2026: https://lafarmbureaunews.com/news/2026/9/23/sugarcane-farmers-thank-governor-landry-for-diesel-relief-during-harvest
Office of Gov. Jeff Landry, "Lowering Fuel Costs, Governor Jeff Landry Takes Action to Help Louisiana Farmers and Timber Harvesters," Sept. 23, 2026: https://gov.louisiana.gov/news/5178
Paul Murphy, WWL-TV 4, "Diesel Cost Sours Start of Louisiana's Sugarcane Harvest," republished by Louisiana Farm Bureau News, Sept. 30, 2026: https://lafarmbureaunews.com/news/2026/9/30/diesel-cost-sours-start-of-louisianas-sugarcane-harvest
U.S. Energy Information Administration, Gasoline and Diesel Fuel Update, released Oct. 6, 2026 (data for week of Oct. 5, 2026; next release Oct. 14, 2026): https://www.eia.gov/petroleum/gasdiesel/
American Sugar Cane League, "About the League," accessed Oct. 8, 2026 (2023 impact figure): https://www.amscl.org/about/
Kurt Guidry, Kenneth Gravois and Michael Deliberto, LSU AgCenter, "Economic Considerations Associated with Destroying Large Acreages of Sugarcane and Converting Land into Alternative Uses," March 18, 2024: https://www.lsuagcenter.com/profiles/lblack/articles/page1710791240646
Joe Gallinaro, Louisiana Radio Network, "According to Agriculture Commissioner Dr. Mike Strain, 2026 Louisiana sugarcane harvesting season is going well," Oct. 8, 2026: https://louisianaradionetwork.com/2026/10/08/louisiana-sugarcane-harvesting-going-well-according-to/
The White House, "Emergency Tax Relief on Diesel Fuel" (presidential action), Oct. 5, 2026: https://www.whitehouse.gov/presidential-actions/2026/10/emergency-tax-relief-on-diesel-fuel/