Fuel prices around the world.

[Snobdds]

I mean if ULSD was my main cost driver, I would be buying future contracts to lock in prices for 3, 6, 9, one year from now.

 

[5030]

Must be nice to be able to write off a hobby
Not something smart to admit to doing on the internet.

Never been a hobby bub. Least I don't sell my product to grow mushrooms on...

One of your usual snarky comments.

You really need to get a life.

 

[Hay Dude]

Why aren't you hedging against fuel prices?

Doing the best I can bro! Only so much I can lock in.

 

[5030]

I was somewhat amazed today. Had to go north on the limited access for a medical appointment and people are actually slowing down from the usual 'warp factor one' that is the normal speed here in Michigan... Of course there was the usual 'flying low at 80' but not nearly as many as usual. Set my cruise at 66 and I actually had a number of people following me. Amazing. Most of the flying low ones were full size pickups and large SUV's and probably most are whiners too...lol. Common sense tells you that slowing down saves gas. Something lots of people lack today.

 

[5030]

Must be nice to be able to write off a hobby
Not something smart to admit to doing on the internet.

You want my FIN or my Michigan Business ID number? We can do both. I do nothing illegal. How about you?

 

[MossRoad]

Me?
Based on what I know about you and your situation, you have far less to lose than myself or anyone who runs an equipment intensive business.

Yeah, that's what I though you meant. And it's kinda insulting. You value your situation as more valuable than others'.

I don't want an answer to this question, as it's too personal, so keep it to yourself... It has to do with my thoughts on Net Worth.

If you took everything you own and sell it, then pay off all of your debts, would you still be able to afford to live the life you're accustomed too, or want to in the future?

If you can answer "yes" to that, then just exactly what is the "everything" that you could lose? You already have it in your hand.

If you have to answer "no" to that, then, well.... you have some decisions to make.

The wife and I made our choices in our late teens. It's worked out well. I hope it works out for you. But comments that you have more to lose than us, well, you get the raspberries for that. PHHHHTTTTT!

 

[dirttoys]

I mean if ULSD was my main cost driver, I would be buying future contracts to lock in prices for 3, 6, 9, one year from now.

I don't play futures much any more, but, off the top of my head contract size is too big and expensive for an operation that burns a few hundred gal/month. My guess is your guidance is good, but scale probably makes it unrealistic?

best,

ed

 

[Hay Dude]

Yeah, that's what I though you meant. And it's kinda insulting. You value your situation as more valuable than others'.

I don't want an answer to this question, as it's too personal, so keep it to yourself... It has to do with my thoughts on Net Worth.

If you took everything you own and sell it, then pay off all of your debts, would you still be able to afford to live the life you're accustomed too, or want to in the future?

If you can answer "yes" to that, then just exactly what is the "everything" that you could lose? You already have it in your hand.

If you have to answer "no" to that, then, well.... you have some decisions to make.

The wife and I made our choices in our late teens. It's worked out well. I hope it works out for you. But comments that you have more to lose than us, well, you get the raspberries for that. PHHHHTTTTT!

Oh boy. Nobody ever said my situation was more important. It’s that my situation is more affected than yours by $5/g fuel. When fuel is $2/G I go through over $10,000 in a year. When it’s $5/G? I’m sure you can do the math….

Lets just say I am very healthy physically and financially. I can bridge these times. More worried about my less fortunate brothers and sisters in similar businesses.
Truckers, farmers, excavators, landscapers….I like to represent their plight along with mine.

They have a much tougher time with these fuel prices than you.

 

[jyoutz]

Sure, I understand that. I think in the past year I've agreed with your view of how it affects your business several times. You're at the mercy of commodity prices. When fuel prices are low, it costs you less, you make more profit. When they're high, you make less, maybe even lose money. But you're putting the main blame on policy, when the main cause right now is the industry's focus on profit for shareholders. Yes, policy has some to do with it, but for the most part, the industry is sitting on leases that haven't been tapped, wells that have been mothballed, and no desire to ramp up production like they did in 2008 when oil was $120 a barrel, only to have it fall to $30 a barrel 5 months later, causing a bunch of oil company bankruptcies and consolidations. They remember that, and won't readily ramp up production when profits are already good. Why risk the investment?

As for the comments about me not having nearly as much to lose... as compared to who?

Bingo!

 

[jyoutz]

Me?
Based on what I know about you and your situation, you have far less to lose than myself or anyone who runs an equipment intensive business.

Yes high fuel prices severely affect the profitability of your business. Not good. But don’t rant about bogus reasons why prices are high. Many people have posted credible sources that explain the causes for these prices, yet you deflect to blame things that aren’t driving these current prices. Obviously you hate the government, but the government isn’t the cause of all your problems.

 

[Snobdds]

I don't play futures much any more, but, off the top of my head contract size is too big and expensive for an operation that burns a few hundred gal/month. My guess is your guidance is good, but scale probably makes it unrealistic?

best,

ed

Haydude makes it sound like he goes through thousands of gallons, not just a few hundred per month. If the perception he gives is correct, then futures contracts will help him.

Otherwise he can go the low rent method of just adding fuel surcharge to the cost.

I just contracted with the guy that cuts my non hay 50 acres each summer around the house. He was charging 25/acre last year. This year he is going to charge 20/acre, but he will draw off my diesel tanks. I think he just got a raise.

 

[jyoutz]

Oh boy. Nobody ever said my situation was more important. It’s that my situation is more affected than yours by $5/g fuel. When fuel is $2/G I go through over $10,000 in a year. When it’s $5/G? I’m sure you can do the math….

Lets just say I am very healthy physically and financially. I can bridge these times. More worried about my less fortunate brothers and sisters in similar businesses.
Truckers, farmers, excavators, landscapers….I like to represent their plight along with mine.

They have a much tougher time with these fuel prices than you.

There’s going to be a lot of cross country truckers sitting idle or doing short hauls. The last time diesel was this high, they were double stacking containers on trains and the interstates had a lot less trucks. I think this might become the norm for cross country freight even if diesel prices come down.

 

[MossRoad]

There’s going to be a lot of cross country truckers sitting idle or doing short hauls. The last time diesel was this high, they were double stacking containers on trains and the interstates had a lot less trucks. I think this might become the norm for cross country freight even if diesel prices come down.

Haven't look this week, but while ice fishing a few weeks ago, the trucks were flying by on the Indiana Toll Road at a rate of about 10 per minute, same as always. The container trains are all double stack. We live by a very busy rail corridor.

I'll have to take a look next time I'm by there.

We have an intersection with gas stations on 3 of the corners. Two are always the same price for fuel, the 3rd is always a penny cheaper for regular gas. Saw $3.99 at the two on Sunday. It was $3.98 at the 3rd. Whoopie! Friend said it was $4.39 on the other side of town this morning.

 

[Hay Dude]

Yes high fuel prices severely affect the profitability of your business. Not good. But don’t rant about bogus reasons why prices are high. Many people have posted credible sources that explain the causes for these prices, yet you deflect to blame things that aren’t driving these current prices. Obviously you hate the government, but the government isn’t the cause of all your problems.

Yeahhhhh ummm no
CNN is less credible than the guys down at the corner bar.
NPR is not credible, either

 

[jyoutz]

Haven't look this week, but while ice fishing a few weeks ago, the trucks were flying by on the Indiana Toll Road at a rate of about 10 per minute, same as always. The container trains are all double stack. We live by a very busy rail corridor.

I'll have to take a look next time I'm by there.

We have an intersection with gas stations on 3 of the corners. Two are always the same price for fuel, the 3rd is always a penny cheaper for regular gas. Saw $3.99 at the two on Sunday. It was $3.98 at the 3rd. Whoopie! Friend said it was $4.39 on the other side of town this morning.

I was mostly talking about the east/west corridors (I-40, 80, 70) that travel from the west coast to the Midwest and East. Local trucking will probably not be as affected. But it’s way cheaper to ship from the Long Beach port to Chicago by rail than truck (75% less diesel fuel per ton of freight).

 

[jyoutz]

Yeahhhhh ummm no
CNN is less credible than the guys down at the corner bar.

Well your opinion isn’t shared by the majority of Americans. They are regarded as having some of the best hard and breaking news in the industry. Anti-government people don’t like them because they don’t play to their contrived conspiracies like other channels do.

 

[Hay Dude]

Well your opinion isn’t shared by the majority of Americans.

Prove it
What you going to do? show me a “poll”?

I think you will see this fall I am right

 

[jyoutz]

Prove it
What you going to do? show me a “poll”?

Now you’re just being a horse’s A.

 

[dirttoys]

Haydude makes it sound like he goes through thousands of gallons, not just a few hundred per month. If the perception he gives is correct, then futures contracts will help him.

Otherwise he can go the low rent method of just adding fuel surcharge to the cost.

I just contracted with the guy that cuts my non hay 50 acres each summer around the house. He was charging 25/acre last year. This year he is going to charge 20/acre, but he will draw off my diesel tanks. I think he just got a raise.

LOL, not speaking for hay dude, and just a wild guess based on one man operation, if he burns 500 gal per month he is a busy dude

My point was: scale is a booger, and a one man show has all the risk and exposure of a big operation, but the hedging solutions used by big operations don't all work for small guys.

If a meaningful input cost doubles, it is hard on everyone that uses that input. Some are better able to manage that than others.

Best,

ed

 

[Hay Dude]

More than a one man operation.
Very difficult to make 1000 tons alone and do everything else we do.
$10,000 a year in fuel is nothing! I used $12,500 in ‘21.
That will jump to over $25,000 this year!