Driving by any gas station lately becomes as frightening as any horror movie we can see. Prices of regular unleaded are back above that four-dollar level, with diesel above five dollars. That is putting a pinch on everybody?s pocketbook. But what about the farmers who rely on that high-priced diesel to keep their operations going? How can they weather this storm, and what is the situation going to look like going through the year and towards harvest?
I talked with Jay Christie of New Century FS in Grinnell. He said that the advice for the immediate future is, ?keep the tanks full.? We don?t know what the prices will be in the months to come.
Christie says that he still expects to see high demand as we continue to climb back out of this pandemic. He also says that refiners don?t seem to be in any hurry to ramp up production because an increased supply means less money for them.
Now, the way the market is set up, forward contracting on future prices is cheaper than buying now. Of course, you are looking at taking a risk that the prices won?t come down between now and then.
While we are still trying to plant the crops, we may not be too focused on the coming harvest. Christie says getting your tanks full now, is going to make it easier when fall comes because you won?t be behind the eight ball when demand ramps up.
