Oil and Grain on Rail

[farmaholic]

Will the downturn in oil prices slow domestic production and a slowing economy curb demand for oil and make more of the limited rail capacity available for shipping grain?


On another note, has anyone seen fuel surcharges fall since the drop in fuel prices?

[cottonpicken]

No,no,no and no.

[SASKFARMER3]

Yea that's a big NO NO and Double NO!
Local terminal did have cars canceled last week and this coming week as well. Same shit show happened last year around this time. Ah games. Trading Diesel truck for a gas me thinks $1.23 vs .92 yesterday!
FM!

[farmaholic]

How bad would the world economy have to get before you see a lack of demand for oil? How long would you have to be in recession mode before there would be a softening in demand. I think its still early.

[cottonpicken]

When you think about it why would OPEC cut. That's like asking Europe to cut wheat production so we can sell at a higher price

[farmaholic]

I was thinking more at home cotton. At what point to they stop drilling new wells or fracking/servicing existing wells to increase production. Therefore open more rail capacity, I realize this is kind of a wishful thinking thought.

[cottonpicken]

We got oil stuff happening on us so get to talk to different layers of people in the industry,plus most of my friends work in it,lots of knowledge to feed off for the past 25 years,i wouldnt pretend to know as much as they do or even some guys here.

My estimation is this has happened really,really fast,so companies are taking a good hard look at programs.So the growth rate of new production coming on line will slow but the key to your question is the decline rate of exisiting wells.I've spent an embarrassing amount of time trying to figure this out,with no solid answers.It is the gold at the end of the rainbow,apply a little math and you have got one hell of a lever.I wonder if that jacob guy is right about the wells being dead in 3 years,i dont think he is.

So to answer your question there is not much relieve in site in the short or medium term.

[ado089]

Services on the fringe of oil production, like oil filed construction types are already laying people off around Lloyd. These guys aren't dummies, they know the response to lower prices is lower production. If only we understood that basic micro economic tenet.

[farmaholic]

ado, I think we all know and understand your point. But getting everyone on side is impossible, hobby even says volume carries us in times of low prices. Also that we(Canadian Producers) are are "insignificant" on the world market. That we will always be disadvantaged with our distance to port and the cost of production on the Canadian Prairies. We will always be on the rollercoaster ride of prices. Lets see what happens in oil, no one wins the race to the bottom and we in Ag know that better than anyone. If anything it provides for more industry consolidation when the few strong vultures get to pick the bones on the casualties of low prices.

[BTO_farmalll]

I fer One, Am So Fckin Sick of Hearing our Distance To Port!!!!!!!!!! Ship From New O'Leans - 36 Days To Chine, Bazil - 46 Days To Chine, BC Coast - 16 Days To Chine!!!!!!! Stick That in yer Pipe and Smoke It, Fckin Thieves!!!!!!!!!!

[farmaholic]

About a buck a bushel for wheat mid point Sask. Its getting the shit to Vancouver.....

[BTO_farmalll]

Two Days er Less To Port From Where I am Sitting Right Now!!!!!!!!!!

[sumdumguy]

Ethanol and biodiesel wasn't viable when oil was $100 a barrel. Politics at its finest!

[fjlip]

So the ethanol and bio diesel industries are who will be run over by LOW oil? Then less demand for grain more carry out and farmers get bit in the end again! Low $CAD means we will not see lower fuel prices either. Lose lose situation?

[BTO_farmalll]

Dont Worry Flip, The US Gov is About To Renew The $1/Gal Tax Free BioDiesel Subsidy Here Shortly!!!!!!!!! Crush, Baby, Crush!!!!!!!!!!!!