Key facts
- Diesel prices have more than doubled in the past year.
- Truck transportation of freight costs rose 19% year-over-year in September.
- Food input costs at early stages of the supply chain rose 15.6% year-over-year in September.
- Prices for toys increased month-over-month by the largest margin ever in September.
The surging price of diesel fuel is contributing to a significant rise in US producer inflation, with implications for consumer costs in the coming months. Wholesale inflation data for September showed producer prices climbing more than anticipated, largely due to the impact of high energy costs, particularly diesel.
Diesel is crucial for transporting goods, with truck freight costs rising 19% year-over-year in September, the fastest pace in over four years. This increase is attributed to diesel prices more than doubling over the past year. The costs are being passed on more quickly than during the pandemic recovery due to a stronger economy and robust demand.
In the food supply chain, diesel powers farming equipment and transportation to stores. While consumer food price increases were moderate in September, costs further back, including energy costs for producers and agricultural inputs like fertilizers, rose by 15.6% year-over-year. Feed products such as corn and oilseeds saw price jumps of over 25%.
Producers are absorbing higher diesel costs or passing them on, leading to double-digit annual rate increases in materials for manufacturing. The rising shipping costs are also impacting consumer goods, with prices for toys increasing month-over-month by the largest margin ever in September, threatening a more expensive holiday season.