It is getting a little pricey here. $3.49 off road and $3.63 on road diesel. In my dually it cost me $20 to go 50 miles. Crazy
Not good!
My fear is it may be last nail in coffin for small opperators. I logged 8 loads off ranch last summer and it took one load just to pay fuel bill and that was before fuel came up that combined with low log prices hurt. Had I not had two pieces of farm equipment that HAD to be paid off saw would have stayed in shed
Goin up up up!!! Gonna be a killer on the small guy
I am working on an earth friendly electric skidder/forwarder/CTL processor and log truck combo. The battery pack will weigh 34 tons and will be charged using three 300 hp diesel generators that run 24/7. The diesel fuel cost to run these gensets will be offset by "green" gov't subsidy programs. I figure I can make money without cutting a stick of wood. :P
I, in the meantime, am using a Chevy Volt to pull wood. I pull the Volt with a TJ 230 with a Detroit. Uses 6 gals a day, wailing away.
Who ever THEY are, they're sticking it to us again. I don't know if this is true or not, I think it is. The local supplier of fuels, told me that one gallon of fuel is bought and sold 20-times before it gets to us.
David
Quote from: dsgsr on January 19, 2011, 06:48:32 PM
Who ever THEY are, they're sticking it to us again. I don't know if this is true or not, I think it is. The local supplier of fuels, told me that one gallon of fuel is bought and sold 20-times before it gets to us.
David
ya sounds about right and not to mention 19 of those people buying & selling are speculators pure & simple and they made some coin on each gallon. If they DIDN'T they wouldn't be doing it...
Mark
its getting expensive. i have three fuel tanks i fill up 2 deisel and 1 gas. i make decent money, and i have been puttin money back into all my equipment. im going to buy fuel at the end of the week :o
My fuel man comes tomarrow [ B.P. ] the only thing about it when I stop at a truck stop and fuel up I can't watch the pump I get *pithed :D But with him we pay and when I fuel up I pump it by hand and theres no numbers flipping by reminding me of the price ;D
I doubled the value of my truck by filling it up :D
Delivered today $3.36 ::)
I am waiteing for them to figure a way to tax us on fuel in a bulk tank(allready paid for once) to corraspond to riseing prices >:( >:( >:(
its not just going to be the last nail in the coffin for the small timers. its gonna hit everyone this time.
wait until everyone starts putting the surcharge for fuel back on everything like groceries and other delevered goods.
there will be quite a backlash.
I filled my farm barrel in late 2008 when it was even higher than it is now. If I do it again now, maybe I can make the price drop again for you guys.
Do any of you use the commodity markets to hedge on fuel prices? With the amount of fuel that some of you use, it would be quite easy to offset those fuel increases by either buying a future (which can gyrate substantially), or buy a call for a fixed month. Of course, you should have done that back in August when fuel was cheap.
Fuel oil companies that guarantee a price do this. I bought my home heating for $2.22 back in August. Price now is around $2.50. I did pay about a 6ยข premium to do this, and it was on 600 gals. For this service, I had to buy all the fuel at one time. But, if the price had dropped, then I would have lost money.
An option or a future contract would allow you to control 1000 barrels of fuel oil. That's 42,000 gallons. Yes, I know that's a lot of fuel. But, that's how the fuel oil companies do it. You could guarantee your price for fuel as much as 2 years out into the future. But, time has value, and there is a premium to be paid.
An at-the-money call would guarantee that your price would remain the same. As prices go higher, the value of the call increases and would offset the higher price at the pump. If prices drop, then the call becomes worth less and you lose the value of the price drop at the pump. It can be a crap shoot. Puts protect against a drop in prices.
Speculators move markets, but there is someone taking the other side of that contract. Do you think trucking companies hedge against price increases?
trucking co hedge fuel? some do some of the eal big ones. my wife is cfo for trucking co large for up here. about 400 trucks .she has looked into it a lot. when its all sais and done it isnt as good a deal as it sounds.with heating oil they may have storage for 40000gal. but trucks running over 25 states putting in 100gal at a time.......
But, you're not buying the oil, your buying a hedge. Sort of like an insurance contract.
Costing me around 100 bucks a day more to run my westernstar! 500 a week or 2000 amonth! Mills won't come up on prices so i can't really take anymore away from the loggers, just have to hang on and see what goes on!
Quote from: Ron Wenrich on January 20, 2011, 05:27:53 PM
But, you're not buying the oil, your buying a hedge. Sort of like an insurance contract.
its more complex than you might think. a lot of the big money lenders will do it for you. wells fargo for one. the last truck insurance metting i went to was in aruba in sept. some of the same guys i have seen at other mettings. none of them i talked to hedge fuel. jb hunt schneider the big boys ...yes....but there have terminals with enought tankage all over the country to hold a boat load
I have mixed feelings, the only reason I am back in the logging business is because of higher fuel prices. First it created a demand for firewood at a much higher price letting me move some of my excess wood that way. The other benefit I have seen is that because of high fuel prices they are drilling for natural gas in my area. The plus side to this is that some of the guys who were logging and barely getting by are now working for the drilling companies. There is a shortage of loggers because of the demand for labor which often pays more than some can make cutting wood. There is now more demand for loggers just because there are fewer of us around. Given the average age of loggers along with the high cost of starting a logging company I do not see any new crop of loggers getting into the business.
While it hurts right now, fuel is getting close a dollar more a gallon than it was last summer. I still have my eyes open for new opportunities because of it. Markets change and I am sure there is a buck to be made because of it. Call me a optimist
We ain't firewood loggers maybe this is our mistake most people out west are still a little better able to fend fer them selfs so firewood don't make enough income to count not to mention every unemployed person is selling wood 120 -150 per cord. But when it takes one load out of every 7 for fuel why bother and I have only one piece of skidding equip and 3 saws involved
I have been freezing in roads and have been skidding small hitches 2-300b/hitch fir & spruce to pack the roads. I have about 1.5 miles of roads frozen and 3500bf saw-logs on the landing after 9 hrs cutting and skidding (3 3hr days after farm chores) . Yesterday I filled the skidder for the first time and it took 13 gallons.
I figure the wood I got is worth about $800+- on the landing and I used about $45+- fuel so my fuel cost for skidding is about 5-6% at this point. This should drop when I run on the frozen roads pulling full hitches (500-600bf for the 440B)
As a little guy I think that fuel prices hurt most if I have to truck longer distances to the markets. I do best when I can sell to small mills close to my woodlot.
In theory higher fuel prices could be an advantage to small mills and smaller loggers if more value added can be produced before a lot of transportation is needed. Hauling lumber is more efficient than hauling logs.
Quote from: Woodhauler on January 20, 2011, 05:49:15 PM
Costing me around 100 bucks a day more to run my westernstar! 500 a week or 2000 amonth! Mills won't come up on prices so i can't really take anymore away from the loggers, just have to hang on and see what goes on!
Thats one thing right there that pisses me off about many truckers.... fuel goes up so they feel they need to get paid more to haul my wood.. ok.. i understand too a point.. but when fuel goes down, nobody wants to let their trucking fees go back down. So I end up paying them the Higher cost cause of what fuel was costing and they are making more off me cause fuel prices have dropped and it doesn't cost as much too fill the rig. Hard enough to make Money when paying for Fuel, Equipment, Maintenance and what have you.. when the mills aren't paying squat
One thing that high fuel prices will bring is the fuel thieves. Yesterday morning was quite cold but both skidders would not start after trying for a few minutes. Then we noticed a cover off the tank. Both machines were drained overnight. We try to keep the machines full this time of year to make it easier to start so they probably got close to 200 litres (55 gallons) >:(. First time we have had this happen in a very long time.
High fuel prices will ultimately lead to everything going up in price due to the fact that everything moves by truck. The only upside to me is that wood stoves are flying off the shelves at the local hardward stores. Firewood will continue to be a hot commodity next year.
Cheers
Ken
Along the lines of Ron's posts:
You can buy oil commodity, oilfield services, oil refiners, or MLPs (master limited partnerships) exchange traded funds, commonly called ETFs; and hedge against price drop by buying a put on the S&P 500.
This should give the upside of oil along with the insurance of the put on the S&P.
The energy sector of the market is the only way to recoup losses from rising fuel prices.
Quote from: Ken on January 22, 2011, 08:06:08 AM
One thing that high fuel prices will bring is the fuel thieves. Yesterday morning was quite cold but both skidders would not start after trying for a few minutes. Then we noticed a cover off the tank. Both machines were drained overnight. We try to keep the machines full this time of year to make it easier to start so they probably got close to 200 litres (55 gallons) >:(. First time we have had this happen in a very long time.
High fuel prices will ultimately lead to everything going up in price due to the fact that everything moves by truck. The only upside to me is that wood stoves are flying off the shelves at the local hardward stores. Firewood will continue to be a hot commodity next year.
Sorry to hear that ken.Terrible that people have to steal from the honest man working to make a living. I started my dozer one day this fall and was walking back to the truck when she quit, smiley_huh2 smiley_huh2 Same thing I had filled it up the night before , they broke into the camp next door and stole jugs and tools. They cut the rubber fuel line on the bottom of the tank , only a 125- 150 litres but still........
Check this site out on the 2011 economic forcast and scroll down to energy. That is a scary bed time story. :o
http://www.kiplinger.com/businessresource/economic_outlook/ (http://www.kiplinger.com/businessresource/economic_outlook/)
Quote from: Ken on January 22, 2011, 08:06:08 AM
One thing that high fuel prices will bring is the fuel thieves. Yesterday morning was quite cold but both skidders would not start after trying for a few minutes. Then we noticed a cover off the tank. Both machines were drained overnight. We try to keep the machines full this time of year to make it easier to start so they probably got close to 200 litres (55 gallons) >:(. First time we have had this happen in a very long time.
High fuel prices will ultimately lead to everything going up in price due to the fact that everything moves by truck. The only upside to me is that wood stoves are flying off the shelves at the local hardward stores. Firewood will continue to be a hot commodity next year.
Cheers
Ken
Had this happen a Few months ago to the Excavation company I was working for, Drained a Komatsu PC200, a Link Belt 225 Spin Ace, and a Dresser Road Grader of fuel.. That *pithed a few people off