Fuel: Buy Now or Wait?

Fuel: Buy now with high prices or wait?

We’re inundated with the “he said, she said, heard from my uncle's friend” a late summer, early fall diesel shortage is imminent. As a farmer/rancher, what should you prepare for higher prices or lack of availability? 

In short, I believe there will be a lack of availability.

Let's say you are growing crops that will bring gross revenues of $800,000-$1,700,000 to your bottom line. If the 2,000-6,000 gallons of fuel needed to get you through harvest isn’t there, then what? 

At the end of the day, even if you pay $4.75 for farm fuel today and it goes up to $6.00 per gallon later and availability is there, you just added $2,500 to $7,500 back to your balance sheet, so that is a positive.  If it drops $2 a gallon, you cost yourself an extra $4,000 to $12,000 dollars which will equate to 0.5-1% of total revenues. 

This is a no-brainer to stock up so you are prepared.

Don't risk a million dollars in revenue because you won't spend $12,000 to ensure your crop is harvested. 

Don’t step over a dollar to pick up a dime.