The war in Iraq and tight domestic oil supplies this past winter sent up diesel fuel prices. You'll be paying more this season, but the price has peaked and probably will decline gradually, say industry analysts.

According to Dave Costello, a U.S. Department of Energy economist, retail diesel fuel prices for the second half of 2003 will likely be between 7 and 20¢/gallon higher than during the second half of last year.

“You could figure an average increase of 13-14¢,” he says. “The supply situation worldwide is tighter this year due to a lack of reserves in inventory. That's partly because of a supply disruption of oil from Venezuela in late 2002 and also due to the colder-than-normal winter in parts of the Midwest and Northeast.”

Crude oil stocks hit near-record lows this past winter, adds Mike Derickson, refined fuels manager of pricing and operations for Cenex. That sparked a rapid rise in per-barrel prices in January and February to around $40.

Costello expects a gradual return to normal supplies and prices by 2004, barring any dramatic worsening in Middle Eastern events.

Derickson concurs. “We will continue to see volatility in the market in the coming months. If the economy remains depressed, that will hold prices down.” If there is prolonged turmoil in Iraq, prices will likely go up.

His advice for growers and custom harvesters: Don't wait until the last minute to buy fuel, hoping to hit the low.

“I would definitely lay in some fuel now,” says Derickson. “Most of the war premium has already come off the prices you're seeing in the country.”

To monitor monthly updates in fuel price outlooks, visit the DOE's Energy Information Administration Web site at