"farm" diesel is dyed red because there isn't any road taxes collected. If you buy it and put it in your truck, it will run just like it did with the other stuff. Thing is if the police types decide to check your fuel ( dip the tank), and it comes out red, your gonna probably pay a whole bunch more than you saved.

 

A year ago on December 1, 2010, is when the EPA's regulation changed to be that ULSD is the only type Diesel fuel for highway use. Evidently that Fuel stop you mentioned has not changed their pump sign. The original ULSD pump sign with the 2007 date is no longer in effect and the EPA required Fuel stops to change the sign to say that ULSD is required for use in all Highway diesel vehicles and engines.

Actually California had that USLD regulation in place within their state back in 2006.

Federal Law prohibits the use of Non-Highway Diesel in Highway vehicles or engines.

 

"#1" and "#2" refer to the density and viscosity of Diesel fuel. (and fuel oil)
#2 is summer Diesel fuel.
#1 is winter Diesel fuel, which is a lighter blend. (similar to kerosene and jet fuel)

A gallon of #1 contains less energy than a gallon of #2, which is the main reason burning winter Diesel fuel results in poorer miles per gallon.
#2 Diesel fuel will coagulate in cold weather.

#3, #4, #5 and #6 fuels also exist. Locomotives and large ships often use #4. #6 doesn't flow well even at room temperature and needs preheating.

The viscosity grade doesn't indicate anything about the sulphur content or the on-highway/off-highway tax/dye status of the fuel. Both #1 and #2 can be either clear taxed on-highway fuel or red-dyed non-taxed off-highway fuel.