Soaring Fuel Expenses Hit Rural Producers

Surging diesel costs are creating severe instability across New Brunswick’s agricultural sector and freight industry. According to data from Kalibrate’s daily pump survey, Woodstock recorded the highest diesel cost among nine surveyed provincial cities on Thursday at $2.77 per litre, which eased slightly to $2.75 per litre on Friday. Regular gasoline stood at $1.99 a litre in Woodstock on the same Friday, adding further financial strain on operations that handle their own deliveries.

Tim Livingstone, who operates Strawberry Hill Farm near Woodstock, reported that his fuel costs jumped 72 per cent compared to last year. Five of his farm’s eight tractors rely on diesel. Because agricultural prices were set months ago, producers are forced to absorb the unexpected surge without pass-through mechanisms.

“When we buy in material … if the price of fuel is up, they charge us more to bring it here,” Livingstone said. “As a farmer, I’m not charging somebody more to bring them a carrot if the price of fuel goes up a particular week. Our prices were set back in February, and so we kind of put our heads down and you have to eat what comes at you.”

Operational Changes and Freight Cash-Flow Disruptions

To reduce fuel consumption, Livingstone’s farm now utilizes smaller vehicles for deliveries whenever feasible. Field management strategy has also shifted. Farmers are reducing the number of tractor passes across fields, parking equipment in favor of manual labor, or evaluating whether harvesting expenses outweigh crop value.

“For farmers that are harvesting with big equipment, though, it becomes a different calculation to the point of even saying, ‘Is it worth bringing my crop off? Will I be able to pay my expenses to get it off, or is it better to leave it in the ground?'” Livingstone said. He noted that fuel expenses have replaced weather as the primary topic among local agricultural workers.

The freight sector faces similar pressures. Chris McKee, executive director of the Atlantic Provinces Trucking Association, emphasized that sudden fuel spikes create major cash-flow crises, particularly for independent operators who must purchase several tanks of fuel before receiving payment.

“A smaller company may have to pay for several tanks of diesel before it receives payment for those deliveries,” McKee said. “So a profitable contract on paper still creates an immediate cash-flow problem when the fuel bills rise sharply. If a carrier can’t recover enough of the increases, it may be forced to move freight at a loss, and you know, sustained losses and cash-flow pressures can drive otherwise viable small trucking companies out of business.”

While some large carriers have instituted 100 per cent surcharges, smaller trucking operations often lack the market power to negotiate such terms with customers. McKee noted that the degree of market volatility and high fuel prices is unprecedented in his industry experience.