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The Impact Crude Oil Prices Have on U.S. Farm Profits

The "Your Profit" column by Al Kluis in the March issue of Successful Farming really dove into how these low crude oil prices will affect the profitability of farmers this year... Here's a part that stuck out to me:

 

"How long will energy prices stay low? Not very long. I am not talking about going back to $100, but $70 crude by late in 2015 is possible. 

I am surprised at how fast the rigs are pulling out of North Dakota. The total rig count there is down by over 50% and may drop another 25% in 2015 if crude stays below $60 per barrel. The more rigs that shut down, the faster prices will turn around."

 

Do you see crude turning around that quickly? Are you purchasing diesel in advance?

Full Story: http://www.agriculture.com/farm-management/other-farm-business/how-cheaper-crude-oil-impacts-us-far...

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Honored Advisor

Re: The Impact Crude Oil Prices Have on U.S. Farm Profits

Last month my Wife bought gas for $1.80 and I looked at the price of hogs and grain and said when gas was 4 bucks we complained but we just paid it, now we`re going broke buying $1.80 gas  Smiley Happy   Hopefully if oil goes up, it`ll pull grain prices with it, though i`m sure some will say "The market doesn`t care how much oil is...if there`s too much grain they`ll pay accordingly".   Higher oil prices will be a excuse anyway to NOT lower input prices.

 

Here`s a Forbes article about a wildcater named Hamm fro "Cowboyistan" that is confident oil prices will go up.

 

 http://www.forbes.com/sites/christopherhelman/2015/03/09/welcome-to-cowboyistan-fracking-king-harold...

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Advisor

Re: The Impact Crude Oil Prices Have on U.S. Farm Profits

Here gas prices on the military bases dropped as low as $ 2.70 in February.  Today they are $ 2.92.

Locally in Japan the price swing has not been very dramatic.  Dropped an average of 10 yen per liter.  Some places more but not much.  Have not paid attention lately as I do not drive much, use the bicycle when I can (water is cheaper!). The yen continues to weaken compared to the dollar so IMO fuel prices will not drop much here. 

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