Last week, Growmark hosted its second annual Media Day. Division managers took time to present an overview and answer questions.
For two divisions, fertilizer and grain storage, managers noted that a wait and see attitude really paid off this year. However, John Cripe, manager of the energy risk management division, says diesel prices are following a longstanding price trend.
According to Cripe, 90% of the time, petroleum prices will bottom out sometime between December and February. Last year, the trend was further exacerbated with the recession. Cripe remembers mid-July oil prices at $147 per barrel. In 90 days, the price had fallen to $40/barrel.
According to Cripe, diesel demand is currently down 5% to 10%. However, gasoline demand is holding steady. As for the coming year, expect the usual summer price spike. But, it shouldn't be as bad as last year. Cripe anticipates gasoline at $2.50 to $3 per gallon by Labor Day, which tends to be the price peak.
Other than that, Cripe says fuel pricing is fairly simple. All you need to know is: prices peak near Labor Day and bottom out in the winter. Purchase according to this schedule and Cripe says you'll be correct 90% to 95% of the time. Cripe suggests locking in at least 50% of your fuel supply during the winter.
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