Iowa Governor Kim Reynolds signed a proclamation this week temporarily suspending Iowa penalties on dyed diesel used to haul agricultural products on public roads, a move Reynolds tied to a recent executive order from President Trump and framed as harvest-season cost relief for farmers.

Reynolds announced the action in a social-media statement, calling the suspension of state fines "in-line" with the White House directive. Brownfield Ag News reported the development. Iowa joins other states that have moved on dyed diesel since the federal order, though the full roster remains unclear.

Dyed diesel is the off-road fuel farmers use in tractors, combines, and irrigation engines. Federal rules bar it from public highways; using it on a road, even to deliver grain to a nearby elevator, can draw state fines.

"It will lower costs for farmers through harvest and beyond," Reynolds wrote.

What does the proclamation actually change?

The proclamation waives Iowa-level fines for on-road use of dyed diesel when the vehicle is transporting qualifying agricultural products. The federal restrictions on dyed diesel remain in force; only the state enforcement layer is paused.

Which products and which vehicles?

Reynolds referenced "certain ag products" without listing them in her social-media post. Comparable waivers posted by neighboring states have covered grain, livestock, milk, produce, and farm supplies. Iowa's full proclamation text had not been published on the governor's website at the time of the Brownfield report.

How long does the waiver last?

The proclamation is temporary and tied to the harvest and post-harvest marketing window. Reynolds did not name an end date in her announcement. State fuel-tax waivers of this type in nearby grain states have typically run 30 to 90 days, with extensions issued when fieldwork runs late.

What does this mean for fuel costs?

Farm diesel goes through combines, grain carts, tractors, and semi-trucks during the busiest stretch of the marketing year. The federal excise tax on on-road diesel runs higher than on off-road dyed diesel, and most states add their own road-use surcharge on top. For a 50-mile round-trip haul to an elevator, the per-gallon gap multiplies quickly across a fleet.

Iowa retail diesel prices reported by the U.S. Energy Information Administration have hovered in the mid-$3.50s per gallon during 2025. The waiver closes the enforcement gap on tax-dyed fuel during the suspension window; it does not change the wholesale or retail price spread between on-road and off-road diesel.

What does not change?

Federal dyed-diesel rules under the Internal Revenue Code still prohibit on-road use, and IRS penalties for untaxed fuel on highways remain active. Iowa's proclamation waives state fines only. Dyed fuel sold or used in violation of federal rules continues to carry federal enforcement risk.

Who else has acted?

Iowa joins an unspecified group of other states responding to the Trump executive order. State agriculture departments in Iowa and neighboring Corn Belt states have fielded grower questions about the federal-versus-state split since the White House order was signed.

What to watch next

Watch for the full proclamation text on the governor's office website, which should spell out covered products, vehicle definitions, and the expiration date. Expect renewal language if Iowa's harvest stretches into late November, as it did in 2024, when wet fields delayed the last soybean and corn acres. And watch whether the IRS issues written guidance on federal enforcement during state waiver windows — a question several state ag departments have already raised with USDA and Treasury staff.