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Diesel Prices--When do you stop operating

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metastable
Join Date: Apr 2004
Posts: 78 North Plains, OR
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2005-03-07          107448

Diesel prices are skyrocketing around most of the US. Prices have almost hit $3/gallon around here (PUC is $0.21/gallon cheaper). This got me thinking about all of you out there. At what price can you no-longer afford (or want to) continue running your diesel equipment?

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shortmagnum
Join Date: Nov 2003
Posts: 848 Wisconsin
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2005-03-07          107453

I don't really burn enough in my tractor to make it too expensive. It has changed all thoughts away from buying a diesel truck though. I think I'll keep my f150 for awhile longer.

I heard on the radio that Willie Nelson is now promoting bio diesel. They mentioned it costing $1.80/gal to produce from soybeans. This sounds like an underestimate to me. Does anyone know the actual cost?
Dave ....

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earthwrks
Join Date: Dec 2003
Posts: 3853 Home Office in Flat Rock, Michigan
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2005-03-07          107461

Stop operating (diesel) equipment? I can afford NOT to! Dollar for dollar diesel is cheaper to operate than gas any day. I've got 5 pieces of diesel equipment, and a diesel pickup. I can run any of them all day under extreme work conditions for $15-$20 a day--and make a return of $600-$1000. My '03 Dodge Ram High-Output 4x4 gets anywhere from 17-28MPG highway, loaded with tools and about 15-17 pulling 15,000 lbs. Can't get that out of gasoline.

As far as biodiesel cost, I'm SW of Detroit in a semi-rural area. Bio is about 25 cents MORE per gallon. To date On-Road diesel is 2.11/gal. and suppose to go up 15 to 20 cents this week. ....

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Iowafun
Join Date: Jul 2004
Posts: 955 Central Iowa
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2005-03-07          107484

My diesel CUT with a 72" mower is still more efficient than the regular gas lawn tractor. Won't be giving up the tractor.

Running a diesel pickup. Still gets better mileage than gas trucks. I may switch it out to the motorcycle for regular runs back and forth to work. Can't beat 45 mpg for the bike. ....

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kwschumm
Join Date: Feb 2003
Posts: 5764 NW Oregon
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2005-03-07          107487

I'm just a small scale tree farmer and don't go through enough diesel for the high prices to have much of an impact. But we were in the market for a Jeep Liberty Diesel for my wife and those plans are on hold. ....

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metastable
Join Date: Apr 2004
Posts: 78 North Plains, OR
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2005-03-07          107495

I guess in small quantities, it probably isn't that noticeable. However, for larger consumers of diesel (like large farms, truck drivers, loggers, etc), it seems that already-thin margins are disappearing. If these consumers start losing money and stop operating, what will the ripple effects be in the economy? At what price would you park your equipment? ....

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earthwrks
Join Date: Dec 2003
Posts: 3853 Home Office in Flat Rock, Michigan
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2005-03-08          107516

From my perspective as a small excavating business owner, the work I do is in demand, that is, consumers cannot do without it. Just like high-priced cars, and entertainment---"big-biz" knows people can--but won't--go without it. Ultimately those costs get passed on to the consumer. Just like the "steel surcharge" we see whenever we commercial guys have to buy something made of steel from a stupid valve to a peice of heavy equipment. UPS and FedEx have a "fuel surcharge" which, again, gets passed onto the consumer. We businessmen cannot just put down our tools as no matter what it takes, no matter what it costs, the job has to be done. Why? Simple. We have mouths to feed and equipment to pay for. Why? Because people need it and so the cycle continues. ....

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Murf
Join Date: Dec 1999
Posts: 7249 Toronto Area, Ontario, Canada
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2005-03-08          107517

The short answer is "never".

Parked equipment = retirement.

IMHO what you are going to see is one of 2 things; a 'fuel surcharge' just like couriers, airlines, and trucking companies, just to name a few, have implemented, or a government scheme, God help us, where the 'ag. fuel' is either subsidized, or rebated in some form.

There is already talk up here about the federal government making the production of Bio-Diesel for Ag. use to be totally tax free. Big incentives for the manufacturers.

More likely is just an increase in commoditiy prices to reflect the increased costs of production.

For contractors and builders, the decision is simple, raise prices, same as when a union demands higher wages, or when the price of supplies goes up.

Best of luck. ....

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Chief
Join Date: Jul 2003
Posts: 4299 Southwest MiddleTennessee
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2005-03-08          107519

For the most part my Dodge Cummins truck and my 4410 are neccessities. The work they do will still be required to be completed. What would be available to take their place??? As already mentioned, when diesel prices get high enough; biodiesel will be cost effective to manufacture. The added competition might do the oil companies some good. I imagine that Archer Daniels Midland could them a good run for the money. The farmers will hopefully benefit from the higher prices for soy beans and rape seed. (currently around $5 a bushel) Best of all, much more of the money spent for fuel would stay here in the States. ....

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brokenarrow
Join Date: Jan 2004
Posts: 1288 Wisconsin
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2005-03-08          107547

If you own a plat truck or pleasure truck that is diesel you (in my area) have been paying more than reg unlead for along time. All you owners of company's can pass on the added cost if you want. MANY MANY contractors have already includeing ALL the cement company's around me. In fact they raised it in 2002 and just raised it again . ALL of us will feel the effect of just about EVREYTHING we buy. it WILL be passed down the porcelin tube and right into the consumers lap. I would not expect a owner to take a loss, it is an operating expense that needs to be addressed. I thought I heard Ill. has a refinery for bio also. MAN this could end up being a good deal for our much needed farm owners if it get to much out of hand. ....

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earthwrks
Join Date: Dec 2003
Posts: 3853 Home Office in Flat Rock, Michigan
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2005-03-08          107558

Any good thing doesn't last for long ie. cheap Bio-diesel. I come from a long line of inventors and tool/die makers. Back in the 1930's my great, great uncle created a "finned disk" that went between the carb. and the intake manifold. It doubled the mileage on a Cadillac of that era. He called a few gasoline companies to see if they would be interested in increasing mileage. They (Mobile Oil) was interested in it for sure! Not because it could save gas, but because it could spell the end of high gasoline consumption---ie., PROFITS. They bought the rights and all the tooling for $3000. It never did make it to market. Gee, I wonder why??? ....

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Murf
Join Date: Dec 1999
Posts: 7249 Toronto Area, Ontario, Canada
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2005-03-09          107651

The price at the pump per gallon is rather moot anyways, if we are talking economy it is only one factor in arriving at the end number, a cost per mile.

If diesel was even 25% more per gallon than unleaded you still have to consider that in most cases the typical diesel pickup goes much farther on a gallon of fuel.

As an example, my truck gets about 20 mpg (low average) and therefore costs me about $85 to go about 680 miles, or about $0.125/mile.

My next door neighbour has a much lighter 2WD Dodge 1/2 ton with a 318 in it. He gets, on average, about 12 mpg, and therefore it costs him about $75 to go 385 miles, or about $0.195 per mile.

Right off the top it costs him 56% more to drive down the road.

Now there is still a lot more to it, initial purchase costs, maintenance, etc., but my point is, in the greater scheme of things the price at the pump is just a small piece of the overall picture.

Best of luck. ....

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hardwood
Join Date: Dec 2002
Posts: 3583 iowa
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2005-03-09          107654

Other than cars and pickups what other coice do we have other than diesel? Indoor forklifts are about the only thing we see using propane. A friend of mine used to use propane powered medium duty trucks, but doesn't anymore because they were worthless at trade in time. Hydrogen is another possibility, but I think that's a long way off. The soydiesel and ethanol look to be our best solution, but I don't know how long that can keep up to demand. When will we stop using diesel? We really can't, perhaps we can combine trips, etc., build more efficent engines I don't know, but for right now we're kind of at the mercy of our supplyers. Frank. ....

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brokenarrow
Join Date: Jan 2004
Posts: 1288 Wisconsin
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2005-03-18          108271

Now that you mention it, a old tow truck company in my town used to run all their trucks on propane.
Murph
I get 16-19.5 with my 1/2 ton gas truck. Where it slaps me in the face is when I am towing. I drop right down to 14-15 imediately and more times than not its more like 14mpg. Its times like those that I wish I had a diesel.
When I replace my truck (hopefully in a few year and my kids will be gone) I want to get a standard cab diesel maybe like the ford that had more room behind the seat). Figure I can swap the cost of the extra cab for diesel. The I could go up to the 3/4 ton and swap the mpg increase.
I am jealous of you guys with the big diesel trucks. ....

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