Record-breaking diesel prices cause trickle-down effect in Michigan
Diesel prices have a wide impact on the cost of other things: groceries, household staples and even the cost of getting regular gas to gas stations, and right now, it's all going up.
According to AAA, diesel hit a record national average of $6.40 on Thursday, up 77 cents since the beginning of September. In Michigan, a spot check at some gas stations in the southeast region on Friday morning showed prices at $7.09.
"This fall, you're going to have combines and heavy tillage, trucks and tractors in the field with this fall grain harvest — those producers are going to be spending probably about $1,000 a day on diesel," said Raymond Moses, a farmer in Livingston County.
Moses has been farming cattle and hay for cattle to eat just outside of Brighton for the last 35 years or so.
"Put in perspective, six months ago, a hundred dollars at the gas station filled my trucks up. Now a hundred dollars gets me about half a tank," he said.
People use diesel to produce and transport goods, so these higher diesel prices are a double whammy of cost, felt unevenly across our economy. Jason Miller, a professor with Michigan State University, said the wars in Iran and Ukraine and a mix of geopolitical issues are to blame.
"You have sort of a perfect storm of supply shocks taking place in various parts of the world. And that's pushing demand," said Miller.
Miller said this sharp increase we're seeing right now will level off — the prices will stay high, and we will see increases in other products, but the cost of, say, a big bag of apples won't go from $2 to $20.
"Rather than $1.99 a pound, you make it $2.09 a pound type of situation, and so that's what you know, consumers can expect is it's not going to be these big, you know, jumps. It may be it's up $0.10," Miller said. "Retailers are also very cognizant of how people anchor themselves to $1.99 versus $2.09 generates very different consumer spending behavior."
