Is it time to hedge your fuel pricing bet? | Michigan Farm News

Is it time to hedge your fuel pricing bet?

Category: People, Markets & Weather, Crops

by Farm News Media

While both off-road and on-road diesel fuels have already seen a significant price increase, it could get worse with the Trump Administration’s announcement to withdraw from the Iran Nuclear agreement and a rapidly deteriorating petroleum industry in Venezuela.

Bank of America analysts released a report recently predicting that crude oil, currently at $77 per barrel, could be headed back to $100 in 2019. The last time crude oil was at that level? In 2014, when on-road diesel spiked to nearly $4 per gallon.

Jenna Mignano, manager of Member Services for Michigan Farm Bureau, said members may want to consider utilizing the MFB Forward Fuel Pricing Program, administered through Grand Rapids-based Crystal Flash, to lock in fuel costs now.

Established in 2017, the program allows MFB members to contract projected diesel fuel needs at pre-determined price, with payment due at time of actual delivery.

“That’s significant, given today’s farm economy,” Mignano said. “Our fuel contracting service allows members to lock in a portion of their anticipated fuel needs at a price that works for them, while also preserving cash-flow for current operating expenses.”

According to Mignano, the MFB Forward Fuel Pricing Program applies to both off-road and on-road diesel fuel, and a number of contract options are available, including single or multiple contracts, and monthly or annual usage contracts.

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To learn more, Mignano advises members to visit MFB’s website or go to the Commercial Fuel Contracting Interest Form to fill out a Contact Request form and view Commercial Fuel Contracting Scenarios.

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