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How do you think the low oil prices will effect farming? The Middle East decided that it was going to allow the world to be flooded with oil in an attempt to break the USA. . What's your thoughts?
Low oil prices and farmers
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This time cheap oil is way different then anytime in the last 50 yrs. the US does not need to export currency to buy energy which is very powerful and causing big currency devaluation everywhere except in the US and the more OPEC floods the market the more they hurt everyone except US. Airline stocks are going up, forest industry is doing better then it had in 10 yrs. Even us farmers are being helped by a weak canadian dollar unless you want to buy a new combine
Where it goes from hear nobody knows or they would be on some warm island living the good life.
Where it goes from hear nobody knows or they would be on some warm island living the good life.
I personally think that this is maybe the sign of things to come for the next while. I know they say corn is king for our prices in Canada but I think oil is King for corn and other prices in the US, whether it is the bio fuel or the economy in general. I don't think the commodities will get hit that bad but I don't think we have to worry about seeing $11+ canola till the barrel price gets up again. Just my opinion of what has happened in the past and usually history is a pretty good fortune teller
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Our Canadian currency will fluctuate with the price of oil, so with our weak $ this is helping with exports, lower fuel costs is a good thing for farming, but what's the savings?? $1/acre at most?? Fuel/food prices were closely linked in 2007 when we saw a tide of higher prices for food at the farm gate, that still holds. Now it seems, food prices are holding there own, I can't see oil staying under $100 for long?
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As long as oil does not drag grain prices down with it...
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Me to!!!???
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From what I have observed:
When the price of a barrel of oil goes up, fuel price goes up.
When the price of a barrel of oil remains the same, fuel goes up!
When the price of a barrel of oil goes down, fuel shuffles sideways.
The Moral of the story is that fuel cartels do whatever the h*ll they like.
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Weird!
Retail lags crude price in a falling market, the pipeline takes time to clear you understand.
Yet in a rising market retail tends to lock step crude.
Is it:
A. Pipeline magically smaller in rising market
B. Corrupt gouging
C. Retailers doing CTA due to C
D. B and C
Retail lags crude price in a falling market, the pipeline takes time to clear you understand.
Yet in a rising market retail tends to lock step crude.
Is it:
A. Pipeline magically smaller in rising market
B. Corrupt gouging
C. Retailers doing CTA due to C
D. B and C
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This is what our dealer told us, when the price is dropping there is a 3 month supply of high priced oil that must be used up.
When price is rising, supply is day to day.
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All of the above.
Like any other significant economic movement, some will get it right, some wrong. I remember a fellow around here, pretty smart guy by most counts. This was about 7 years ago? "20 cents a gallon more and I'm done farming!" I remember thinking, wow! Really? Hard to say how much fuel went up from that point, what, $.80 to $1.00? And record profits on farms due to high commodity prices.....
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I'm not so fast to blame OPEC. There is a lot of new oil in the market right now and that should drive down the price of oil. Just like grain prices oil is a commodity. If your farm was OPEC why should you cut production so your neighbor can keep fertilizing and push production and benifit from less production from you. Competition is good for all of us. The oil the US no longer imports hase to get absorbed and used by someone. If the world economies start to slow down who uses it? We all also drive more fuel efficient vehicles which is good no matter how cheap gas is. We spend money on other things beside gas.
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Good to hear.
I will have to check if my local Coop is starting to cut price too.
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FWIW.
The trucking company my brother-in-law works for got an email from their supplier today claiming diesel will drop 20 cents/liter Monday morning. All the drivers were told to park their trucks empty for the weekend.
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I knew that bio fuel was a stupid idea years ago and now it looks even worse
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Thanks for the information.
Might have to check this out next week.
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