Is it just me or does it seem like if some guy tips over a gerry can, the price of fuel goes up? Don’t get me wrong, the situation in the Middle East is serious stuff and should concern us, but on a different level. Will it warrant a two dollar a litre price? Granted, that is speculation at this point, but when people talk two dollars by summer, it’s enough to get drum up concern amongst farmers.
At high fuel consumption points like seeding and harvest, any increase in fuel prices can have a substantial impact on farmers margins. Controlling input costs is an essential part of profitable farming. Fuel is one of those major input costs, and controlling it is fairly difficult depending on weather conditions and the amount of passes over the field required.
More and more farmers are considering trying to hedge their fuel costs with pre-buys but it can be a very costly decision if you pre buy at the higher end of the market. Diesel prices have run higher since the uprising in the middle east but the question is whether there is more bull to this market than bear? Is now the time to prebuy for harvest or should you be waiting till the summer to start making some early fuel purchases. I asked all these questions and more to Gordy Elliott from INL FC Stone in Minneapolis.
If you cannot see the below video of Gordy Elliott, Click Here.