North Dakota Allows Red Diesel for Hauling
Governor Kelly Armstrong and federal officials temporarily permit lower-taxed red-dyed diesel for on-road farm hauling as prices climb.
Updated on Nov. 7, 2026 in Agriculture
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North Dakota and the federal government have temporarily allowed farmers to use lower-taxed red-dyed diesel for on-road hauling. Diesel in the state averages over $6 a gallon, up more than $2.50 compared with last fall.
Why it matters
Diesel is a major input cost for North Dakota agriculture, and the temporary tax relief aims to ease pressure on producers during a sharp price increase. On-road hauling accounts for a modest share of farm diesel use, so the effect on overall costs depends on how much of a farm's fuel is affected.
Diesel in North Dakota averages over $6 a gallon, up more than $2.50 compared with last fall. On-road hauling accounts for 5-15% of a farm's total diesel use, and the USDA has not yet said how its $8 billion in new funds will be split.
The players
Kelly Armstrong
Kelly Armstrong is the Governor of North Dakota, who helped authorize temporary use of lower-taxed red-dyed diesel for on-road hauling.
United States Department of Agriculture
The United States Department of Agriculture is the federal agency responsible for farm programs and is planning to announce how $8 billion in new farm funds will be distributed.
The details
Governor Kelly Armstrong and the federal government temporarily allowed the use of lower-taxed red-dyed diesel for on-road hauling. The move comes as farmers face higher fuel costs, while the USDA is expected to release a formula for distributing $8 billion in farm funds.
Timeline
- November 2026: The USDA may announce the distribution formula for the $8 billion in farm funds.
Roadmap
Red-dyed diesel is normally reserved for off-road farm and equipment use at a lower tax rate. This temporary authorization extends that lower-tax treatment to on-road hauling as fuel prices rise.
Farmers and haulers in North Dakota may pay less at the pump for on-road hauling under the temporary red-diesel authorization. Producers should check how much of their diesel use qualifies, since on-road hauling is only 5-15% of total farm diesel.
The takeaway
Fuel tax relief can ease costs only for the portion of diesel use it covers, so farmers should track which hauling qualifies. Watch for USDA's distribution formula for the $8 billion in farm funds, which may affect operating budgets.
Further reading
Explore more North Dakota Agriculture coverage for context on farm fuel costs and policy.
Source note: This article includes information reported by KSJB AM 600.
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