Do I Really Need to Contract Fuel?

Do I really need to contract? When is the right time to contract?  How do I know if I’m getting a good price?  Why is the price of the contract higher than today’s price?

Over the years, there has been a lot of discussion and even a slight bit of controversy over the subject of fuel contracting on the farm.  Let me tell you this, there are no right or wrong answers to these questions.  I honestly don’t know if these are even the questions you want to be asking yourself when thinking about contracting. 

This time last year crude oil was hanging out around $60/barrel, which was about the average for 2019, and the beginning of 2020.  Until Covid hit the US, and along with it came the potential for an economic disaster that could top the Great Depression.  On April 20, 2020 the crude market made history; closing the day at -$36.98.  For 1-day crude oil was worth less than nothing! What a day, filled with fear and uncertainty. Since this day the markets have seen a slow steady recovery, very slow.  Non the less, we are currently hanging out around $45/barrel.  With no sign of complete economic recovery in the near future, the market has bounced a bit in the past few months; but seems to really like that $45/barrel marker. 

Though the energy markets seem very content under $50/barrel right now, we have to ask ourselves, what does the next 9 -12 months actually have in store for us?  Will the US continue to struggle financially?  Will Covid continue to rule the energy markets?  Will the new administration bring in new changes that will ultimately affect the markets?  The unknown can be quite scary. 

So, let’s go back to the original questions:

Do I really need to contract? 

That depends, how will you be affected by a price spike that could bring diesel fuel up over $1+/gallon higher than the current price?

Does contracting give you piece of mind?  Do you like to gamble?  When is the right time to contract? 

There is no right or wrong time to contract.  Historically, pricing is at it’s best between December & March…but history doesn’t always repeat itself!  If 2020 taught us anything, it taught us that!  Leaning on your energy sales consultant is the best idea. 

How do I know if I’m getting a good price?  What is a good price? 

The question you really need to ask yourself is; does this price work with my annual budget? In other words, can I spend this much for fuel and still make the necessary profit for my business.

Why is the price of the contract higher than today’s price? 

Contract prices can sometimes be higher than the current rack price (not always) because we are buying “futures”.  With “futures” purchase there is always a risk, and risky behavior comes with a higher price-tag!  Speculations of the futures markets can also wreak havoc on contract pricing-will there be supply issues in spring or fall?  Will there be a bumper crop and cause for higher demand for fall?  Will the prospect of a new administration cutting US drilling cause prices to skyrocket?  These types of conversations will definitely raise eyebrows and lock in pricing!

Back to the original question of “is contracting your fuel important?”

The answer is = YES, it is important, but it is not the best option for everyone.  Only you can make that decision if contracting is right for you. 

One statement I make to my customers: DON’T LOOK BACK!  What I mean by this, if you lock in your fuel at a price that you are comfortable with, stop shopping.  There is no reason to waste precious time looking for the cheaper price, there is always going to be a cheaper price, but there is always going to be a higher price too.  For your own piece of mind, lock it in and forget about it.  DON’T LOOK BACK, you might trip over something in front of you!

Written by Kim Leisner, Certified Energy Specialist

Cenex® Gift Cards for Gallons Started November 1

Starting November 1, 2020 through February 28, 2021, end-user customers can earn one $50 VISA® gift card for every 100 gallons of qualifying lubricant and grease products purchased.

Eligible lubricant products include:

  • Irriflex®
  • Maxtron® DEO
  • Maxtron® Enviro-EDGE®
  • Maxtron® GL
  • Maxtron® THF+
  • MP Gear Lube
  • Qwiklift® HTB®
  • Superlube 518®
  • Superlube TMS®

Eligible grease products include:

  • Corn Head Grease
  • HD Moly Xtreme
  • Poly-Xtreme®
  • Maxtron® EP
  • Blue Gard® 500+™
  • Fluid Gear Grease
  • Molyplex 500+
  • ML 365®
  • Red Protect XT®
  • Maxtron® FS

To redeem purchases, end-user customers must complete a redemption form, attach their detailed invoice(s) and/or receipt(s), and mail the documentation as instructed no later than April 6, 2021. Contact your energy specialist with any questions.

Article courtesy of Cenex Fuels & Lubes

Keeping Engines Protected During Brutal WI Winters

It’s time once again to take steps to protect your diesel-powered equipment from harsh winter weather. Cenex Premium Diesel Fuels are exactly what you need – from moderate temperatures to extreme winter cold and everything in between.

CHS Larsen Cooperative takes your winter fuel needs seriously. The Energy Sales team, works closely with our logistics crew and drivers to ensure that every one of our customers gets the proper winter blend. 

Every year, in late October we begin the process of preparing your fuel for winter. We start out with an additive we refer to as WAIV or Winter Aid 4/Cold Flow improver.  This additive is made up of de-icers and wax anti-settling agents.  This additive mix has a treat rate of 1 gallon WAIV for every 1600 gallons of #2 diesel, or in our case Cenex premium diesel, this helps extend the operability of your equipment during the late fall chill. This is an inexpensive, yet effective plan for early weather treatment.

Then, as the very popular holiday of gun deer hunting season approaches, or some of you may know it as Thanksgiving week; we move from WAIV to Cenex Premium Diesel Seasonally Enhanced or SE.  This switch can occur slightly before or after deer hunting, depending on outside temps and forecasted weather.  The ultimate goal with Seasonally Enhanced fuel is to create a 70/30 blend in your tank.  70% #2 to 30% #1, which delivers cold filter plugging protection to approximately -25 degrees and an operability level of about -13 degrees.  Depending on outward weather forecasts, we usually continue delivering Ruby Fieldmaster SE and Roadmaster SE through March of the following year. 

As you can see, CHS Larsen Cooperative goes to great lengths to assure our customers that their fuel is prepared for winter weather.  What can you, as a consumer do to help the process and obtain the proper blend to keep you moving once we freeze over?  Below are a couple things to think about as winter approaches…

  1. Work with your CHS Larsen Energy sales team member or your local driver to make sure you leave enough room in your tank to blend the #1 in with your current #2 or Cenex Premium Diesel fuel supply. Sometimes it is necessary to stop delivery of fuel for a short period of time to allow tank to empty some.  We call this blending down a tank.  Make sure we do this early enough in the season, when temps aren’t yet arctic.  As a reminder, #1 will not blend properly if the outside temps are below the current cloud point of the fuel in your tank.
  • Don’t forget about your equipment!  You know the tractor that you haven’t used since July and don’t plan on using again; until you have to move snow in January.  Well that tractor has no #1 fuel in it!!!  Take it for a ride and use the fuel, refill it with winter blend.  This is a lot easier than emptying the tank, heating everything with a hair dryer and changing a filter, in -2 degree weather!
  • Preventative maintenance! Change your tank fuel filters twice a year, spring and fall. Old fuel filters equal plugged fuel filters equal no fuel coming out of your nozzle!  Don’t have a filter on your tank?  It is imperative you get one asap. Tanks get crud in the bottom of them, it’s life; the last thing you want to do is pull that crud out of the bottom of the tank and put it inside the fuel system of your equipment.  Call your Energy Sales Team Member and we can get you set up with a tank fuel filter system. 

If you have any questions about winter blending or Cenex Premium Diesel please call us, we are happy assist you with all of your energy needs. 

Written by Kim Leisner, Certified Energy Specialist

12 Propane Grilling Safety Tips

It’s grilling season!

Antsy to fire up your FAVORITE CHARBROILED RECIPE? While grilling season is all about having fun with loved ones outdoors, it’s important to take proper safety measures before your first cookout. Outdoor grills have become very popular, and propane grills, in particular, come with their own set of precautions. To start your season off right, brush up on some important propane grilling guidelines below.

Purchasing your cylinders

  • Check all propane cylinders for dents or scratches before purchasing. Indentations can indicate potential leaks. 
  • While transporting cylinders in your car, be sure to keep them upright and secured in place. Cylinders rolling around in your trunk or backseat can result in propane leaking into your vehicle. 
  • Note that most states have restrictions on how many cylinders can be transported by motor vehicle at once. It’s always a good idea to review local laws and restrictions with your local fire department.

Filling your cylinders

Whether you’re heading to your cabin or campsite this weekend, or just staying home and firing up the grill? We’ve got Propane fill stations all over Northeast, WI. Follow the link to a map of all our LP Fill stations: https://bit.ly/lpdispenser

Using your propane grill

  • Before you begin, take a few minutes to re-familiarize yourself with your grill’s manual. Double check the proper procedure for connecting a cylinder and for igniting your particular model.
  • Use your grill in an open area with good clearance above it. Remove any combustible materials that may be nearby.
  • Propane has an odor added to it that is similar to that of natural gas, so use your “sniffer” to detect signs of leaking.
  • Keep the lid of the grill open while lighting to avoid flash burns.
  • While operating the grill, maintain site lines and watch for any flare ups.
  • As a bonus safety precaution, have a water bottle nearby just in case any food or grease should catch fire.

Clean up and storage for next season

  • While packing up your grill, clean off any food residue or remaining grease to avoid any future flare ups or fires.
  • For long-term storage, keep cylinders upright, secure and out of reach for children.
  • Most states have fire codes for how many cylinders can be stored in one place. Your local fire department will have specific guidelines for your area.

For any other questions or concerns about propane safety, you can check out the PROPANE EDUCATION AND RESOURCE CENTER’S website or the CHS Larsen Co-op Propane site.

By: SCOTT PEARSON Director of Risk & Asset Development, CHS Propane in PROPANE

Image courtesy of FLICKR USER.

CHS Larsen Delivers $5,000 Grant to Iola Car Show

Joe Opperman, executive director of Iola Car Show Inc. and Pat Brosseau, energy department manager of CHS Larsen

Historic nonprofit event—a source of Wisconsin pride—to use grant to improve event grounds

The Iola Car Show, an annual nonprofit event for auto enthusiasts, was honored as a source of pride to the community by CHS Larsen and Cenex®, the energy brand of CHS. As part of this award, the Iola Car Show received a $5,000 grant to further develop its event grounds for future celebrations.

Due to the coronavirus pandemic, the car show was replaced with the first-ever Rally for Iola that occurred on July 11. Rally for Iola was designed to bring the community together in uncertain times. It featured a car parade through the show grounds followed by a scenic 60-mile road cruise through Waupaca County. Shortly before the event, the $5,000 grant was present to Joe Opperman, executive director of Iola Car Show Inc. by Pat Brosseau, energy department manager of CHS Larsen. The grant money will be used for new siding on the event’s Toy Barn, a signature landmark of the show.

“We were thrilled to be the recipient of the Hometown Pride Grant,” said Joe Opperman, “this money is being used to maintain a key feature of the show for attendees to enjoy for years to come.”

Set to resume the annual celebration in 2021, the Iola Car Show is the largest car show and swap meet in the country. The event attracts more than 115,000 car enthusiasts each year and raises money to support its community. Since 1984, the nonprofit event has given back more than $8.4 million to more than 130 different local organizations and projects, including youth sports teams, Boys and Girls Clubs and conservation organizations.

“The Iola Car Show has been a monumental event to our community for close to 50 years,” said Brosseau. “Although we’ll miss it this year, we’re proud to support the continuation of such a unique event for years to come.”

The grant was provided through an initiative that encourages Cenex dealers, retailers and distributors to share stories about what makes their local communities special. In its second year, the initiative will grant more than $100,000 to Cenex communities this year.

“The Cenex brand is committed to supporting and celebrating what makes hometowns across America special,” said Mark Vanderlinde, communications manager at CHS. “We are proud of our Cenex dealers, like CHS Larsen, who play an active role in enriching their community’s culture, no matter the circumstances.”

About Cenex

Cenex, the energy brand of CHS, provides high-quality refined fuels through nearly 1,500 locally-owned convenience store locations across 19 states. Consumers depend on Cenex fuels, lubricants, propane and renewable energy products to power homes, businesses and communities. CHS, Inc.(www.chsinc.com), which owns the Cenex brand, is a leading global agribusiness owned by American farmers across the United States with domestic and international operations including energy, agronomy, grain trading and food processing.

Plan Ahead to Purchase Cenex® Grease this Summer for Gift Cards

Starting June 15 through August 14, 2020, end-users can earn VISA® gift cards on qualifying Cenex® grease products. End-users will receive a $15 gift card for every qualifying 4-10 pack or 35-pound pail purchased during the qualifying time frame.

Customers may also receive a $50 VISA gift card for every qualifying 120-pound keg purchased during the promotional window. Qualifying grease products include:

  • HD Moly Xtreme
  • Poly-Xtreme®
  • Maxtron® EP
  • Blue Gard 500+™
  • Molyplex 500+
  • Maxtron® FS
  • Red Protect XT™
  • ML 365®
  • Fluid Gear Grease
How it works:
  1. Provide a copy of the redemption form to the end-user to submit their claim. You can get these forms from your Certified Energy Specialist
  2. End-user completes the Summer Grease for Gift Cards redemption form, attaches required receipts, and mails it to CHS post-marked no later than September 16, 2019.

Questions? Contact your CHS Larsen Co-op representative.

Cenex® Premium Diesel Additives: Injection Stabilizer and Demulsifiers

Cenex® Premium Diesel has a more complete additive package for a more complete burn. Every gallon contains a tailored blend of seven additives that are terminally injected to ensure the highest standards of quality and performance.  

As part of the Cenex Premium Diesel education series that kicked off in September, we will review each of the seven terminally blended additives that are found in Cenex premium diesel fuels, starting with the injection stabilizer and the demulsifer.

Injection Stabilizer

The injection stabilizer addresses fuel oxidation problems that can cause gum formation. When gummed fuel passes through the fuel system, it clogs fuel injectors and filters which leads to unnecessary downtime. Cenex Premium Diesel contains injection stabilizers that prevents the formation that builds deep inside high-precision injectors and keeps the fuel from coking. 

Demulsifiers

One of the most problematic sources of mechanical and filter failure is water, it is critical to separate and remove water from the fuel system. Cenex Premium Diesel contains demulsifiers that force water to the bottom of the fuel tank for easy removal. Both new and old equipment contain a water release valve that is intended to remove water from fuel storage tanks. Engine manufactures recommend this to reduce and eliminate moisture-contaminates in fuel from passing through the combustion chamber.

Competing products may claim that emulsifiers are better at controlling moisture than demulsifiers. Emulsifiers just “break-up” the water to pass through the fuel system instead of forcing it to the bottom for removal. Modern diesel engines that utilize high-pressure common rail technology have enormous amounts heat and pressure that build up and heat these suspended water particles. Forcing heated water into a fuel system, that can generate over 35,000 psi, causes damage to engine components – which we know leads to unexpected downtime and expensive repairs.

Cenex premium diesel fuel provides a more complete burn to keep fuel and exhaust systems clean, increasing power and efficiency with less repairs or down time. Learn more about the complete additive package and stay tuned for our May article when we dive into Detergents and Lubricity Improvers.

If you would like to learn more about these additives and how Cenex Roadmaster XL® or Cenex® Ruby Fieldmaster® can benefit you, contact your local Cenex representative with any questions.

Five winter propane safety tips

Good tips to keep in mind throughout this winter season.

1. Clearly mark propane tanks

When a winter storm hits, finding a propane tank under feet of snow can be a difficult job. To make tanks easier to spot, customers should mark the location of their tanks with flags, poles or stakes. When selecting a marker, they should make sure to choose something that’s taller than the average snowfall in their area.

2. Remove snow and ice from propane tanks

In the event that a propane tank becomes covered in snow, it should get cleared it off using a broom — not a shovel — to prevent damage to system components. Regulators, regular vents, piping, tubing and valves should all be kept exposed. For easy access to tanks, customers should always maintain a clear and plowed pathway to them.

3. Notify snowplow contractors of propane tanks

After a heavy snowfall, it’s possible for a snowdrift to completely hide a propane tank. Customers who utilize snowplow contractors should make sure the operator knows the locations of all propane tanks on the property. If a snowplow were to come into contact with a propane tank, it could become a potentially serious safety hazard.

4. Consider a propane-powered generator

When a storm knocks out the power, it can sometimes take days for rural roads to be accessible to repair crews. A propane-powered backup generator can provide customers with peace of mind that they won’t be stuck without power in the event of a blackout. Remember, even if a generator is portable, these should never be used indoors or in an enclosed space.

5. Maintain an adequate propane supply

Even after a winter storm is over, roads can still be inaccessible by delivery trucks for days. To sustain any periods of interrupted deliveries, it’s important for customers not to let their propane tanks get too low. Suppliers who offer automatic deliveries can suggest this solution to help their customers ensure their tanks are topped off adequately.

Safety tips adapted from online LPGas article “Building Customer Trust Starts with Safety”

Covering Your Energy Needs for 2020

To contract or not to contract, that is the question…or is the real question: when to contract? or at what price to contract??? 

These things can lead to a lot of stress, not only for the consumer, but for the energy consultant too!  Over the years I have developed a strategy that helps answer some of these questions and alleviate the stress associated with planning out your annual energy budget.  Let’s look at some of the tools that have helped me assist my customers with making educated decisions.

Recently, I spoke with a customer who has contracted for almost two decades. Though he feels contracting is usually a good option, he still remembers the time about 6/7 years ago when he locked in and the market tanked.  His contract ended up being higher priced than the local market.  This made him feel like he “lost”. I reminded him that other years his contract price was lower than the local market, so I guess you could say that he “won” during those years?  I am not a huge fan of the “winning/losing” outlook.  Customers will actually benefit more from a contract if they use it to set their budget for the year.  When contracting time comes around and someone is ready to lock in their pricing for the year, I ask them a few questions:

  • Is this a price you feel comfortable locking in? 
  • Will this price work with your annual budget?  If not, what price will?
  • Do you have a target we should be looking at?

When is a good time to contract? Again, I look at historical pricing.  Fuel pricing futures tend to be at a lower level Dec-Feb.  Though, this may not always be the “winner”, it is a great tool to utilize when making buying decisions.  FYI: the best contract price offered last year was 12/29/19, but not this year, futures pricing saw a steady to stronger outlook though the first of the year. They remained strong up until the past few weeks. With talks of a less volatile year, fears of travel bans due to the Coronavirus (China) and possibly, just an all over relief that 2019 harvest is over, we are finally seeing crude oil looking for a reason to finally drop below that $55/barrel marker.  So, this is not perfect, but it gives us a darn good idea of when; not to lock in futures pricing.

My suggestion is to talk to your local energy consultant and clearly explain your needs for the upcoming year.  Together, you can come up with a plan for your spring/fall 2020 fuel needs.  Again, I want to stress that locking in your fuel supply is not about winning or losing, but focusing on setting a budget for the upcoming season. 

My final advice that I give to all of my customers is DON’T LOOK BACK!  What I mean by that is; after you decide to lock in your fuel price at a value that works for you and your business, don’t drive yourself crazy by watching the market and constantly second guessing yourself and the decision you made.  Please feel confident that you made a good decision and though pricing may or may not drop lower, you are going to be OK and a few extra pennies per gallon either way will not make or break your business!

Welcome Tiana to Energy Sales

We are very excited to announce that on January 6, 2020, we welcome Tiana Schroeder to our energy sales team. Tiana comes with 20 years of experience in propane sales and service. In her pervious employment she managed four district propane offices along with two satellite locations. Throughout her 20 years, she was involved with all customer service, operations and financials happenings within the company. With her strong management skills in operations she will be a great asset to our team.

Tiana is eager to work for CHS Larsen Cooperative to be a part of the positive culture. She is looking forward to creating connections with our small business owners and farmers by working for the local cooperative. She values relationships and wants to help build opportunities for our customers in central Wisconsin.

In her free time, she enjoys spending time with family, including her two grandbabies. She grew up on a small dairy operation with horses and still enjoys riding them from time to time. In the summer, her family likes camping and boating on the local lakes.

As Tiana gets started, she will be stopping out to meet you in person and learn more about your needs and how we can service you better. If you wish to contact Tiana feel free to reach out to her.

© 2021 CHS Inc.