Why It’s a Great Idea to Lock in Propane

 

As we approach the contracting, pre-pay, budget season for propane, it’s a good idea to look at why proactive options are a great way to take the guesswork out of your future LP needs. By contracting/locking in your future propane needs for the upcoming heating or crop drying season, you have the peace of mind of knowing you have the propane you will need for the fall and winter of 2018/2019.

Over the last five years, we have seen extreme volatility in propane prices. Remember when prices were over $5.00 a gallon? Did you know inventories in season with heavy usage periods have caused prices to spike and supplies to be stretched during the extreme cold periods of winter–I think the weather folks use the term “Polar Vortex” instead of Alberta Clipper now? Just last winter, inventories of LP in the upper Midwest were well below the 5 year average mark, which caused some propane suppliers to go to forced allocation/maximum delivery gallons of 200 gallons per stop. Because CHS Larsen Co-op Supports propane contracting, pre-pay, budget, and summer fill programs so heavily, we lock-in propane gallons during the summer with our suppliers so you, our customers, don’t need to worry come fall and winter.

Most of our competitors will buy propane gallons in season on the open market, which could be a problem if non-contracted gallons are scarce and expensive. At CHS Larsen Co-op, we lock-in these needed gallons by purchasing futures propane contracts for in-season heating and crop drying needs. As one of our customers, when you lock-in propane gallons you have the advantage of knowing you will have the propane you need, when you need it, at the agreed upon price–no hassle, no worries, no guesswork of wondering how high propane prices will go when the cold arrives.

Last year we saw propane prices surge past $2.00 a gallon during the extended cold weather periods in January and early February.  CHS Larsen Co-op customers that locked in propane at a substantially lower price during the summer contracting period of 2017 did not have to be concerned about surging LP prices or supply/inventory issues. Looking forward at the 2018/2019 heating and crop drying season, we once again face lower propane inventories at this point in time due to heavy and growing exporting of US product to expanding world markets. This demand is not just heating needs but mainly for manufacturing needs as propane is a major component of many finished products. This scenario, just like last year, leads us to believe we will see cost of propane jump up during the cold months/heating season. The best way to combat this future price increase is to contract your needed gallons this summer and to take advantage of the CHS Larsen summer fill program so you do not have to worry about your heating needs for this winter.

CHS Larsen Co-op is just a phone call away. We are here to take the uncertainty and guesswork away in helping you lock-in your propane needs.

By Todd Plath, Certified Energy Specialist

Start the New Season with a New Grease

As you prepare for working in the fields, don’t forget about grease. Your equipment depends on grease for protection from intense friction that ultimately leads to the breakdown and improper operation of your machinery. That’s why choosing the right grease is one of the most important preparations for the busy, high-pressure planting season.

New formulations, better performance 
When you buy Cenex® grease this spring, you may notice it looks different than it did last year. Don’t worry, this change in appearance is intentional to make a better-quality grease. Plus, when creating its new grease formulations, Cenex asked for feedback from farmers and used this to direct changes.  

Cenex greases, including BLUE GARD+™ and ML 365®, have been reformulated to meet higher quality standards. You may notice the greases have a lighter color. This change is due in part to replacing sulfur in the original formula with calcium carbonate to improve performance under high-moisture conditions. 

These new grease formulations stay in place longer, creating a reliable layer around critical equipment parts. This in turn protects your equipment from rust and corrosion and is better suited for temperature fluctuations throughout the changing of the seasons. 

Remember these grease best practices   
New formulations will only help if you’re using the greases properly. Now is a great time to revisit best practices for choosing a grease.

1. Analyze your needs. Not all greases are created equal. Allow time to reflect on what you need your grease to do and what conditions it will encounter, including temperature and moisture level. Be sure to talk through your needs with your local Cenex dealer for expert advice. 

2. Check compatibility. Many types of grease will not work effectively on top of each other, so if you’re changing greases, don’t just combine it with existing greases. To ensure compatibility and consistency down the line, take a photo of your current grease’s packaging and use this when talking with your Cenex dealer about greases. 

3. Read the directions. Be sure to read the directions for your grease gun carefully. Some models come with anti-debris filters that can restrict flow if the wrong cartridge is used. 

As the seasons change, so should your operational practices. By taking time now to ensure best practices are in place, you’ll save yourself time and money down the road. To help determine which grease suits your equipment needs, contact one of our Energy Specialists to help you decided what works best for you. 

 Originally posted on Cenexperts Blog 

Encourage your cooperative to apply for Seeds for Stewardship matching grants

Seeds for Stewardship matching grant
Spring and warmer weather are upon us. It’s a great time to plant the seed of community support and grow pride in your community by encouraging your local cooperative to apply for a Seeds for Stewardship matching grant. Since Seeds for Stewardship began in early 2017, CHS has partnered with more than 70 local cooperatives on more than 100 projects in rural communities. Your cooperative could be next!

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Maximize Your Yield With Foliar Nutrition

CHS Larsen Co-op joins the fight against rural hunger

Shana Shepard, Energy Customer Service Rep, delivered to the New London Community Cupboard, Kim Ebert.

CHS Larsen Cooperative joined CHS locations across the country in fighting rural hunger with the cooperative’s annual CHS Harvest for Hunger food, funds and grain drive. The annual campaign gathered more than $540,000 and 215,000 pounds of food to fight hunger in rural America.

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Weekly Grain Update – May 30, 2018

 

After A Nice Rally, Bearish Factors Line Up

The grain markets witnessed a tremendous run up in price last week after the productive meeting with the Chinese chief negotiator last week.  Now, the market wants to see some results of this meeting before taking the market any higher.  Trade volume was light towards the end of last week, and this allowed the bulls to easily push the market to new highs without much resistance.  As the market opened Monday night after the long Memorial Day weekend, the bullish mentality began to change.  Tuesday was a bearish day on many levels.  The market opened up strong Monday night and made new highs, only to trade lower and close lower, and some markets closed below the previous day’s lows.  This is the definition of a key reversal, and many grain markets witnessed this on Tuesday.  Technically, this is a bearish signal that might send grain futures lower for a significant amount of time.

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Weekly Grain Update – May 23, 2018

Trade War Avoided.  Bean Planting Much Ahead of Average. Corn Planting Almost Complete.

The big news this week is that a trade war between the US and China has been avoided.  The Chinese head negotiator spent all last week at the White House trying to hammer out a deal between the two countries.  Many of the details are not yet worked out or known at this point.  However, progress has been made, and an outright trade war will not occur.  It appears each side is working through the negotiating process, both giving in and taking, in order to reach a compromise.  The issue with the US is the huge trade imbalance with China.  President Trump is very committed to getting the US back to a more even trade balance with China.  A big trade imbalance is when the US buys more products from China than China buys from the US.  The current trade imbalance is roughly $600 B annually, and this process will try and get this reduced over time.  Obviously, the US needs China to buy grain from us as well as many other manufactured goods.  Frankly, China needs our soybeans in order to satisfy all of their needs.  China is still buying all of their beans from Brazil, and have practically stopped buying any beans from the US in the last 6 weeks.  Each week, we patiently wait for news that China has purchased more beans from us, but this has not happened recently.  This news that a potential trade war has been avoided is a huge deal to the bean market as it signals that China will once again start buying our beans.  Now, we must sit back and patiently wait to see the Chinese finally buy our beans once again.

The market is in full anticipation mode since Monday.  News started to surface on Friday that a trade war with China has been avoided.  As expected, the funds purchased grain futures on this news and pushed all grains higher over the last few sessions.  If China starts to buy US beans again, this is supportive to the grains and the bean market.  So far, the market has ramped up in anticipation of more Chinese purchases, but we have not yet seen any real activity.  I get the sense that we have now pushed grain futures as high as we can go until we see the actual Chinese buying occur.  At the end of the day, this buying is what must occur, not rumors that it will occur.  Time will tell.  Stay tuned.

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Monthly Energy Market Update – May 23, 2018

Well, spring is finally here, and so are four year high fuel prices. Gasoline is reaching almost $3, just in time to kick off the official driving season.

Why the high prices you ask?  It’s simple, all energy products are valued off of supply and demand.  The more supply you have the lower the value, while higher demand and low supply give you higher values.

Geopolitical unrest in the Middle East are causing production interruptions, as well as complete shutdowns of oil fields. Most recently, Venezuela, who is our 4th biggest importer has really caused some problems. They are having major financial woes, the country is practically bankrupt.  In addition to their financial crisis over the past year, they recently had their presidential election.  This election was deemed to be a shameful scam.  The current president Nicolas Maduiro won again, with 66+% of the votes.  Basically, it sounds like ole Nick had a bunch of his oppositions supporters thrown in jail for odd reasons; non-of which seems legit!  I guess he has enough of them locked up, that it actually tipped the scales into Maduiro’s favor and with regards to the vote count.  I just don’t get it…I mean…woohoo- I cheated to become the leader of a crummy, financially ruined country that owes other countries so much money that we are running the risk of being sold, to another country. Apparently, to celebrate his recent victory—he plans on liquidating the few “riches” the country has left by selling them.  Personally, I like to celebrate things with cake, specifically Cheesecake!

OPEC has seen great success with production cuts.  They may be a little too successful, taking crude oil from the huge glut we saw two years ago, to what I believe now, is almost a shortage.   It has gotten to the point now, where pure greed has taken over, this is definitely not a good thing.

Asia has exactly the opposite problem that Venezuela has.  They are booming economically, and are creating huge problems for us on the propane side of things.  They are willing to pay $0.20 over the actual value of propane.  This has caused record high exports, and now we are again seeing a shortages here in the U.S.  So, when we should be seeing a decrease in propane prices, we are seeing this odd springtime boom….not normal.

Looking back over the past year, crude oil is 30% higher than last year at this time. With crude oil being the leader, all of our commodities are following that path, with diesel fuel seeing a 27% hike, gasoline is low man only realizing a 20% increase and propane is a steady 26% higher.

So to sum things up, the energy market seems to be a bit out of control right now, with certain commodities acting like they don’t even know what time of year it is (propane).  Unfortunately, my crystal ball is in the shop getting overhauled, so I cannot predict when these bullish markets will back off, but what I can tell you is this -> The consumer sector can only handle so much.  If the prices get too out of control and maintain for too long, people will start to cut back.  We will cut back on driving, find more economical ways of farming, and we will even cut back in the grocery store.  This all has a significant effect on the energy markets.  When that times comes, I think we will see a swift collapse.  But how soon will this happen?  I guess we will have to wait for my crystal ball to get back from the repair shop to find out…

By Kim Leisner, Energy Sales Manager

Choosing the Perfect Fuel Company—For You

Choosing a new fuel supplier after you have had a long standing relationship with your current supplier can be extremely stressful.  Stressful, but sometimes a necessary part of your business process.  Has your business model grown or changed in some way?  Is your supplier still fulfilling all of your current needs?  What are your top priorities when choosing a new fuel supplier?  I know we all immediately turn to the price of the product- but what if Supplier A was lower in price than Supplier B; but with Supplier A you were constantly running out of product or you were never able to contact the company representative when you had questions or needed assistance?  Supplier B is always available, they had a system in place that allowed them to know the amount of fuel in your tank(s) at all times?  Would you pay a little extra for excellent service and a premium product?

Business Owners’ Fuel Concerns

Having many conversations with local business owners I have encountered many of the same questions & concerns.  Below, I have listed five major concerns that seem to weigh heavy on business owners minds.

  1. I can’t afford to run out of fuel, how will I be sure that my tanks will be full?
  2. What happens if I have a fuel related breakdown?
  3. Who do I call if I have a problem after normal business hours?
  4. How will I know if I am making the right decision to lock in pricing or buy off the open market?
  5. Can I buy all of my energy products from the same supplier, rather than dealing with different companies for each product (ex: oil/grease or propane or fuel).
Providing Solutions for Your Concerns

At CHS Larsen Cooperative, we are invested in our customers’ best interests; so, we have addressed these major concerns.

  1. We have a monitored tank system for both propane and fuel tanks, which ensures you will always have fuel when you need it. This keeps you operating efficiently and making money!
  2. Fuel related issues? Not a problem, CHS Larsen Co-op with Cenex offers the Total Protection Plan (TPP) which is one of the best equipment warranties on the market. How do you qualify?  Just use our fuel and oil products!
  3. Your Energy Specialist are always available to assist with questions, concerns or operational issues, as well as an emergency phone number where our customer service representatives are available at all times; Day or Night / Weekend or Holidays. We are here for you.
  4. Our Energy Specialists are always aware of the ever changing market conditions and share this information with our customers daily. They are able to give you all of the information you need to make the best buying decision for your business.
  5. CHS Larsen Cooperative offers a complete line of Cenex fuel, Cenex oil & grease as well as propane. Imagine, one invoice for all of your fuel needs!  Your bookkeeper will thank you.
We are Here for You

We have a fully staffed service department that is available for repairs as minor as a diesel pump change out; to larger jobs like hooking up your new grain dryer system with propane.

As you can see, we care about our customers and their success.  After all, your success is our success.  As your business grows, we want to grow with you.  Wouldn’t you rather buy your energy products from a partner that is invested in your future, rather than buying from just another fuel company?

by Kim Leisner, Energy Sales Manager

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