Oct 03, 2007 - 04:02:15 CDT
Rosemary Patrick, whose family farms in the Wilton area, said they were surprised Tuesday when they went to fill up on diesel at the local station and were told the station was out.Although the Patricks are done harvesting, they were getting ready to fertilize, which requires the use of a tractor. Which, of course, requires diesel.
They wanted about 800 gallons, Patrick said.
Ken Vetter, general manager of the Cenex in Wilton, said they ran out of No. 2 grade diesel Tuesday, but not premium grade. And while he's not worried about a potential tightening on supply, other retailers and suppliers around the state, as well as growers and producers, may be feeling the pinch.
Because after the unleaded gasoline shortage in North Dakota petered out, finally bringing the average state gas price down from the No. 1 spot in the lower 48 states, a tight statewide diesel supply flared up in its place. In fact, North Dakota's diesel prices, averaging at $3.30 a gallon, rival only Hawaii's for the top spot.
That's a little daunting for some farmers and suppliers in and around the state.
"We've been running all over,"said Brian Johnson, vice president of Johnson Oil out of Hallock, Minn. "My closest supply point is Grand Forks, North Dakota, and we haven't seen diesel in Grand Forks for a couple of months."
Johnson said they haven't run dry, and they are finding fuel, but they have to travel longer distances for it. That affects the price, which is passed down to the growers looking for the fuel to get their harvests going, he said.
"That's the core of our business,"Johnson said of the growers, adding that this time of year is their peak for demand. "We've been able to fill all the orders, but you have to look at unconventional supply points."
He said the ability of farmers to pick up the phone in the morning and get a load of diesel by the afternoon has all but dried up.
"That's just not going to happen,"Johnson said. They may get it within the next couple of days, but not immediately.
Bill Hejl, a sugar beet grower in the Red River Valley, said he was well aware of the factors that may lead to shortages, and filled up his tanks on his farm well in advance.
"I called my fuel supplier, and he said he had 15,000 gallons of fuel left,"Hejl said. His supplier wasn't sure when that would be replenished, so Hejl filled all of his tanks:an 8,500-gallon fuel tank for his tractors, and a 500-gallon tank for his four trucks.
The tank for tractors should last him through the harvest, he said, but he wasn't sure about his over-the-road fuel.
Mike Sinner, executive director of the Red River Valley Sugarbeet Growers Association, said they warned growers about filling up tanks before the season started, in anticipation of supply constraints.
"We don't normally have to do that, they're normally on top of all of that,"Sinner said. "This year, it's something new. We had to get the word out without causing the panic."
Producers in the Tappen area may be having a tough time finishing up their potato harvest, as Tappen Oil has run out of diesel about three times in the past month.
"It's a very tight supply,"said co-manager Kermit Bauer. "Very nasty supply on fuel. We have to fight tooth and nail to try to get any product."
Bauer said he expected to be out of diesel by Tuesday night, saying that it was difficult to determine when another tank-load would come in. Tank-loads are generally 7,500-10,000 gallons; Tappen Oil's three tank-loads a week has dropped to only one tank-load a week.
Supply at Tappen Oil is on a first come, first-served basis, Bauer said. They don't anticipate having to ration, however.
Mike Rud with the Petroleum Marketer's Association said the shortages are all a result of the downed refineries from the summer coupled with the high demand in the fall, as well as lower production levels from a refinery in Minneapolis going down for scheduled maintenance.
Johnson with Johnson Oil said when the refineries come back online from maintenance, they'll be adding 50,000 barrels a day to production, good news for nearby suppliers and the Midwest as a whole.
Both Minnesota and North Dakota have extended hours of service for truckers to help with shortages; the North Dakota governor's office also has contacted refineries asking for increased supply.
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