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marketeye
Veteran Advisor

Pre-Paying For Diesel?

I had a market analyst send an alert to me, today, suggesting to buy 50% of this year's diesel needs. What's the local diesel price in your area, if you would share please? Also, will you pre-price some diesel now? And what percentage of your total cost of operation are diesel costs?

 

Thanks,

 

 

Mike

 

Tags (3)
11 Replies
rawhide
Advisor

Re: Pre-Paying For Diesel?

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illinifarmer
Advisor

Re: Pre-Paying For Diesel?

Let's just say you would have to sell 1bu. Of corn for 1 gal of diesel in Chicago. Probably use 1000 gal for planting and another 1000 gal for harvest. Another 300-400 for sprayer so that's 2400bu of corn to pay for the fuel. I avg. 156bu corn on 1000 acres. It's a pretty good % of costs diesel. If that helps give you an idea. If oil continues to fall like the grains I would see no reason for pre-sales. It is nice to have one cost of production lower however it does not make up for the market price. Nor the continued hike for seed, rent, chemical, fertilizer, machinery, labor, and basic operating costs.
BA Deere
Honored Advisor

Re: Pre-Paying For Diesel?

$2.01 farm diesel and road is $2.55, you can book fall farm for $2.19 and a few pennies less for volume or actual pre-pay.  Fuel isn`t a big cost in the scheme of things for me anyway, altough if I can fill for $2, it`s more fun than $3 or $4  🙂    I think it`s an expense that I will let ride, don`t see it going up a buck or anything and if it would hopefully the grain prices would follow it higher.

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roarintiger1
Honored Advisor

Re: Pre-Paying For Diesel?

Farmers lost far more money yesterday on USDA's predictions than they will ever lose by not buying their diesel fuel now.  

sw363535
Honored Advisor

Re: Pre-Paying For Diesel?

Mike we are looking at diesel purchase in November....... Prior to cold winter price raise and after we see the harvest yields. 

Continued market slides and a big crop are not going to lift crude prices., crude supplies and ethanol production are not dropping much yet and there is no indication I can find that says OPEC will back off before then..

Maybe your informant has better info....

 

died diesel is  $ 1.90 transport

 

truck diesel   $ 2.40 

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OKdon
Senior Contributor

Re: Pre-Paying For Diesel?

My son in law that works in the oil industry claims we will see much lower fuel price come fall. There is a glut of crude and summer driving is all that is keeping the bottom from falling out. His words not mine.

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Kay/NC
Honored Advisor

Re: Pre-Paying For Diesel?

We filled up ur kittle irtigation fuel tank today, just under two bucks. I could get used to this!
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Jim Meade / Iowa City
Senior Advisor

Re: Pre-Paying For Diesel?

Year in and year out, the cheapest time to buy fuel around here is Dec - Feb.  I haven't been watching this year, but will likely go with the winter purchase time.

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johnmate37307
Contributor

Re: Pre-Paying For Diesel?

There is no doubt in this fact that the diesel is a very crucial element if you are running the farming business as you have to use it in your tractors, threshers and all other machineries to cultivate the farms.

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