GAS DOWN - DIESEL UP

[deere755]

The thing you don't realize about farming is that farmers do not set prices for their goods. Grain and livestock prices are determined by the board of trade. We have 2 choices hold our products until the price gets to where we want it (which is almost impossible) or sell when the bills come due. Most of the time bills come before the price comes. I wish we could set prices for our products. Then when inputs go up like diesel we could raise our price to match.

 

[midlf]

Farmers do set the price for their product. No so much as individuals but as a collective supply. If you stay in the business of farming, or hang on, you are, in effect, saying the price you receive is adequate. If you quit then the supply drops a bit and the price increases a bit. As an extremely oversimplified scenario, if 1/2 the worlds grain producers got out of production, the price of grain would at least double, maybe go higher if that hit the shortage curve.

 

[VA_Joe]

It is all about supply and demand and the managing of the two. In the oil business - it is the OPEC cartel that manages supply and therefore exerts upward control on pricing. The difference between oil and food is that the supply of oil can be easily managed by simply not taking it out of ground. Provided that demand does not decrease due to the higher prices resulting from a reduced supply, the price of oil can be manipulated/controlled within a given price range (at least until the cartel members decide it is in their best financial interest to cheat on their quotas by overproducing).

The farmer's supply is a function of how much land is put into service and how good/bad the weather is. Since the farmer has no control of the weather - their only control over supply is to either put less land into service or to destroy excess crops. Without knowing what the weather will be like a year in advance - taking land out of service is like betting that the next growing season will be a good one. If this bet is wrong, then supply will suffer and prices will go up. In this situation - the individual farmer lost an opportunity to make "bumper profits" because he/she did not put more of their land into service to take advantage of the higher market prices.

Conversely, if too much land is put into service (which is like betting the growing season will be bad), and that particular growing season turns out to be an especially good one, then supply will surpass demand and prices will quickly move downward. In this case the farmer is not only getting less for their crops but also must incur the cost of putting so much "unnecessary" land into service. Because there is no cartel to control supply (i.e. each farmer makes individual decisions based on what they perceive is best for them - without the "big picture" thinking of a cartel) the Government steps in and attempts to perform the supply management function via farm subsidies to either take land out of service or to use crops for something other than food (e.g. biodiesel, ethanol, and etc.).

In short - because of the unpredictabilty of supply and the lack of a "cartel" to manage it - the farmer situation is much different and more precarious than that of the oil producer.

 

[gsxr1100]

So $5 for 100 miles, $50 savings for 1,000 miles and then the whopper, $500 for 10,000 miles traveled. Again you pay the increase in % just to have a weasel, more this and that and to save $500 within 10,000 miles. So in 100,000 miles you save the little amount of $5,000? You are breaking even just on the costing factor. What a huge savings. Stop, you are making me want to buy a diesel and pay more for fuel.. /forums/images/graemlins/blush.gif /forums/images/graemlins/blush.gif

Bail??? Hmm, not even going to comment on this since my years driving one and never an issue. Don’t get made since you paid more and still go slower…Some day you can step up and buy one that can out run an auto, someday (diesels are not included here too).
/forums/images/graemlins/cool.gif /forums/images/graemlins/shocked.gif /forums/images/graemlins/smirk.gif /forums/images/graemlins/grin.gif

 

[slowrev]

Why does the price of gas traditionally go up each fall as the refineries switch over to producing heating oil ? Or at least that is the story they give.
And the same story in reverse in the spring when the switch back to gas production.

 

[MossRoad]

<font color="blue"> I do not even care about what the prices are. I buy it when I need it and fill it up. I have more important things to worry about then fuel. </font>

I think we had a talk about this type of subject back in April. Some folks can afford things that others have to scrimp on.

Every dollar I save, every dollar, is important. The way I was taught by my parents is you don't give your money away, no matter how little it seems to be. One hour's wages after taxes that I could better use for food, clothes, savings account and school for the kids is very important to the average American . You have to remember that there is a very broad base of people here at TBN. From low wage earners to millionaires, young and old, etc... a couple bucks saved here and there goes a long way for a lot of folks. You made your point several posts ago. Why keep hammering on it? /forums/images/graemlins/confused.gif

 

[SkyPup]

Same old story, supply and demand.

 

[gsxr1100]

</font><font color="blue" class="small">( I think we had a talk about this type of subject back in April. Some folks can afford things that others have to scrimp on.

Every dollar I save, every dollar, is important. The way I was taught by my parents is you don't give your money away, no matter how little it seems to be. One hour's wages after taxes that I could better use for food, clothes, savings account and school for the kids is very important to the average American . You have to remember that there is a very broad base of people here at TBN. From low wage earners to millionaires, young and old, etc... a couple bucks saved here and there goes a long way for a lot of folks. You made your point several posts ago. Why keep hammering on it? /forums/images/graemlins/confused.gif )</font>

“Why keep hammering on it? “

Well, people are complaining about, what, an extra $0.75 per gallon since last January???

Everything you stated I and others have to deal with and that is life. Nothing new here. Do I like higher taxes (double), higher fuel, higher benefits, higher insurance, no but again this is nothing new here. That is life.

But it is the same old story whine whine whine….there are people with no homes down south, families with love ones overseas in the military (getting killed) and we are complaining about a little increase in fuel price.

Pay the extra price <$0.75 per gallon and move on with your life.

 

[MossRoad]

It is not a little increase in fuel price to someone that has to spend significantly more % of their income on it than you or I do.

That's the point. To you or me, it may seem like a drop in the bucket. But to someone else, it is a big deal. A very, very big deal. Especially when we are talking about someone that has no choice but to use diesel, or home heating oil, for that matter.

 

[gsxr1100]

All fuels are going up here so what’s the deal?. Again this is nothing new. If $0.75 per gallon is killing you, you better do something quick since all fuels are high along with everything else here.

If your bills are that close to having nothing, you have bigger problems then fuel.

I have NG to heat my home and that is going up 30%. Wow, big deal. If I do not like it I can get propane, going up too. Or use wood that is cheap but dirty as you know what; plus not worth the time.

And compared to my other increase (noted above) fuel is dead last on my list. My broadband and Sat TV bills are more then it.

I think people have to face th facts here diesel will continue to be more so move forward. Don't like it, do something else. If not, deal with it, move onward and stop whinning.

People love to complain about things the have no control over. God, I feel like I am at work.