Record Diesel Prices Threaten To Push Up Wisconsin Grocery Bills
With diesel at $6.13 a gallon, grocers and truckers brace for higher costs across the supply chain.
Trucks.
Diesel prices in Wisconsin have hit record highs as the war in Iran continues to disrupt the flow of the fuel globally.
In Wisconsin, the average price per gallon of diesel fuel on Wednesday was $6.13. Last year, the average in the state was $3.45 per gallon, according to data from the American Automobile Association.
Mike Semmann, president of the Wisconsin Grocers Association, said the price of diesel will have an impact on many different parts of the grocery supply chain.
“Diesel is to the economy what electricity is to a home,” he said. “For Wisconsin consumers, it’s not just about what diesel costs, but about how businesses across the state are really trying to work to keep those costs from becoming a burden on Wisconsin families.”
He said diesel costs affect every part of the supply chain, and grocery stores pay special attention to diesel prices as part of their overall costs.
“Diesel helps move milk to and from farms, ingredients to processors, products to stores and goods to consumers,” Semmann said.
In Wisconsin, about 85 percent of goods are transported by truck. The President of Wisconsin Motor Carriers Association, Dan Johnson, said about 30 percent of the costs for a trucking company go toward fuel. Trucking companies have to raise their prices for transporting goods when diesel prices get this high.
“The trucks need to be a part of that supply chain to keep all of those products moving from the producer to the market,” Johnson said. “They (trucking companies) do have strategies and measures in place to handle some of these surges, but of course, those only can go so far.”
Some of those strategies include negotiating prices with fuel suppliers and adding surcharges to their customers’ prices. Semmann said that although grocers might see higher prices because of this, stores have gotten creative with keeping prices for consumers down.
“Grocers specifically are trying to make sure that they’re adapting and looking for efficiencies,” he said. “Wisconsin consumers are really very savvy when it comes to trying to make sure they’ve got the best deal on any type of goods that they’re trying to purchase.”
Johnson said trucking companies and their customers often have longstanding relationships which can help them reach agreements about prices.
“They understand that the price of fuel is going to fluctuate from time to time,” he said. “There’s some things that we can’t predict, whether it’s a war or a natural disaster or something like that.”
He said this isn’t the first time the trucking industry has dealt with high diesel prices. When the war in Ukraine started in 2022, prices hit record highs for that time. Semmann said the conflict in the Middle East is largely attributed to the new record highs.
“It’s not unfamiliar territory to us, but obviously we’d like to be out of it sooner rather than later, ” Johnson said. “The trucking industry — they’re very resilient. They can weather quite a bit, and they have in the past.
Record high diesel prices likely to drive up cost of groceries, other goods was originally published by Wisconsin Public Radio.
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