September has blessed us with a lot of heat and wind which has accelerated the crop progress. We once thought we would have a fair LP usage season to now our thoughts have changed. We still will use some, as some start corn harvest in that 23-24% range to minimize header losses, but the demand will be nothing like we expected. Therefore, supply shouldn’t be an issue. Our local storage of 900,000 gallons gives us ample buffer for any demand we encounter and with supplier access not being stressed by allocation, it should be a seamless fall LP supply wise.
As mentioned in the last article, B20 which stands for 20% soy-methyl ester that is mandated or required to be in Minnesota end user diesel fuel, goes back to B5 or 5% soy-methyl ester here now October 1st. I think a lot of you held off, per our advice, as we cautioned our customers of cold weather operability issues with the higher soy concentration. Again, this was advice given individually and not a blanket approach. Some of you could burn through a tank of B20 by October 10th and then take B5 and have no issues. Some of you may get into corn later, and then with cooler temps, you may have seen issues if not for proactive planning on how you were going to use that fuel up by for sure October 31st.
Beginning this winter our sales staff will be on a campaign to inform you of a “loophole” or clause in the mandate to where if you lock in by contract B5 with money down before April 1st, you can run B5 all year long. I do not like to use the word “loophole” professionally, but it is the best word to describe the function.
As a sales staff, we will keep you up to date on prices through the months of December to March allowing you to make an informed decision to buy ahead of the April 1st deadline. This will afford you the opportunity to have the security of running B5 all year around with little to no worries about cold weather operability.
I will stress, I am a proponent of soy in diesel fuel. When the EPA took sulfur out of the diesel fuel, this inherently made the diesel fuel more “dry,” as sulfur was the lubricity agent in diesel fuel. The terminals do inject lubricity additive into diesel fuel, as with today’s High-Pressure Common Rail Injection Systems operating at 40,000 PSI injection pressures, we need to have as much lubricity as possible to prevent that kind of pressure from wearing on injector pumps and injectors. Soy-methyl ester is a natural lubricity agent and helps keep the fuel more “slippery” and not so dry. A win, win, in my opinion, getting engine operation benefits and supporting our product that we produce, soybeans!View News