Record high diesel prices are creating severe instability for the farming and trucking industries across New Brunswick. If you rely on local produce or shipped goods, these soaring fuel costs will eventually impact your wallet. According to a recent report from CBC News, the price at the pump forces local businesses to make difficult decisions just to stay afloat.

Farmers Forced to Cut Back

Tim Livingstone owns Strawberry Hill Farm near Woodstock. He relies on diesel to fuel five of his eight tractors. This year, his diesel costs jumped 72 percent compared to last year.

The daily pump price survey from Kalibrate showed Woodstock hitting $2.77 per litre for diesel recently, with prices peaking at $2.86 per litre in September. Regular gasoline also sits high at $1.99 a litre. To cope, Livingstone uses smaller vehicles for deliveries whenever possible.

Farmers face a unique challenge because they cannot easily pass these costs onto consumers. Livingstone explains that his prices were set in February. “As a farmer, I’m not charging somebody more to bring them a carrot if the price of fuel goes up a particular week,” he said.

To save fuel, farmers are reducing the number of times they drive tractors over their fields. Some are even parking their equipment to do more manual labor. Livingstone notes that some farmers with large equipment are questioning if harvesting their crops is even worth the expense.

Global Conflicts Drive Local Prices

International conflicts play a major role in these rising costs. The ongoing conflict involving Iran disrupts global shipping routes. Before recent escalations, the Strait of Hormuz handled about 125 commercial vessels daily. This route accounts for roughly 20 percent of the global crude oil and liquefied natural gas supply. When global supply chains face threats, New Brunswick businesses pay the price at the pump.

Trucking Companies Face Cash Flow Crisis

The trucking industry feels the exact same pressure. Chris McKee serves as the executive director of the Atlantic Provinces Trucking Association. He says the price of diesel puts massive strain on smaller trucking companies.

Small operators often pay for several tanks of diesel before they receive payment for their deliveries. This creates an immediate cash flow problem. “If a carrier can’t recover enough of the increases, it may be forced to move freight at a loss,” McKee said. He warns that sustained losses will drive viable small trucking companies out of business.

While fuel surcharge mechanisms exist, small operators lack the bargaining power of larger carriers. Some companies need to implement 100 percent surcharges just to cover diesel costs. However, negotiating these large surcharges is rarely an option for small businesses competing for loads. McKee notes that the current situation and the uncertainty of future prices are unprecedented in his time in the industry.

Frequently Asked Questions

Why are diesel prices so high in New Brunswick?

Global conflicts heavily influence local fuel prices. Disruptions in the Strait of Hormuz impact roughly 20 percent of the global crude oil supply, causing prices to spike worldwide.

How do high fuel prices affect local farmers?

Farmers cannot easily change their prices during the season to cover unexpected fuel costs. They must absorb the financial hit, reduce tractor usage, or resort to manual labor to save money.

Why are small trucking companies at risk?

Small trucking companies must pay for fuel upfront but often wait weeks to get paid for their deliveries. This creates severe cash flow problems. They also lack the bargaining power to demand higher fuel surcharges from their clients.