Scheduled refinery maintenance this fall will impact diesel supplies for Upper Midwest farmers, possibly causing a 15- to 30-cent increase per gallon, just when farmers will need additional fuel for harvest, according to Tony Headrick, an energy analyst for CHS Hedging.
In September, refineries are expected to go into maintenance mode and reduce production from 2014's 530,000 barrels per day to 250,000 barrels per day--nearly a 300,000-barrel per day reduction. October diesel production also is projected to decrease.
"We could see localized price pressure [from September through December]," Headrick said. "So it's important for farmers to be in front of that. We recommend they fill their storage tanks before they need it."
During his presentation at a recent CHS media day, Headrick also provided an overview of oil and gas markets. The outlook in 2015 and 2016 suggests international crude oversupply will maintain, he noted. Summer gasoline demand has been strong and U.S. refineries have been producing refined fuels at high levels. He predicted $2 per gallon gas for the spring.