For Better Profitability, Lock-In Natural Gas

November 7, 2015 05:36 AM
For Better Profitability, Lock-In Natural Gas

Profits are calculated sales – costs. For farmers, improving profitability doesn’t only mean trying to sell for the best price. Higher profits can also be achieved by decreasing expenses. Bryan Doherty of Stewart-Peterson LLC says that if he were a farmer looking to secure profits, he’d turn to natural gas.

“If I’m a corn producer thinking long term,” he says.  “I’m going to look at where I can find value. Where can I buy inputs cheap?”

Turn your attention to natural gas. The predicted mild winter and the lack of corn dryers running throughout the Midwest have pressured the price of natural gas to a three-year low. Doherty reminds farmers of three years ago when the corn crop came off the field wet and every dryer in the country was running which led to shortage of natural gas and propane in the upper Midwest. Doherty says what we are experiencing right now is the exact opposite.

“It’s at near record low prices,” he told "AgDay" host Clinton Griffiths. “It could go to zero I suppose but that’s not likely.”

Doherty says farmer would be smart to lock-in this cheap input and improve their profits.

“It’s a value commodity that farmers should look at for sure,” he says.

Meanwhile, Chevron announced plans this week to reduce its workforce by more than 6,000 people as gas prices drop 5 cents lower and the national average price of diesel is $2.50 per gallon.

Watch the full interview with Bryan Doherty on this segment of AgDay:


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Spell Check

bruce olsgard
turner, MT
11/11/2015 01:24 AM

  hi, great idea, how to do this. thanks


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