Blog > December 2018 > Fuel Contracting is the Key to Insulating One's Operations From Extreme Risk

Fuel Contracting is the Key to Insulating One's Operations From Extreme Risk

December 19, 2018

To assist producers in controlling their planting and harvest expenses, Central Valley Ag strives to offer various forms of refined fuel contracting programs. Similar to many commodity markets, the petroleum market changes on a daily basis. Many times, the high demand season for petroleum during times of planting, harvest and travel are accompanied with higher prices.

Forward contracting fuel needs during off-peak times can “fix” the price of the petroleum product prior to delivery, taking away any concern a customer may have regarding future price fluctuations. A forward contract, however, cannot guarantee that market conditions won’t bring lower prices. When considering contracting, compare what risk the contract price presents to you versus what impact rising prices would have on your operation.

Fuel contracting must be done in advance to take advantage of opportunities, which can evaporate with a single act of weather, the latest supply rumor, or something as simple as a Trump tweet. In a rapidly changing and expanding global economy, your operating costs are influenced by far more than just the local weather.

Contracting is the key to insulating one’s operations from extreme risk, assuring a predictable and fair price, and making your business or operation more financially successful over the long term.

Central Valley Ag offers price daily covering various time frames. Please contact your CVA energy office or representative today and let us help you lock in your fuel price for 2019.

By Tracy Haller, Energy Administrative Lead 
Posted: 12/19/2018 9:49:34 AM by Mallory Shoemaker | with 0 comments

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