Air passenger miles, which had been rising for years, fell sharply in 2020 because of the pandemic and remain depressed. That means more jet fuel can be turned into diesel fuel, helping to hold down its price, NDSU Extension bioenergy and bioproducts economist David Ripplinger said during a recent online farm show presentation.
"This is really important to agriculture. We can convert and modify jet fuel into diesel fuel, which is great (for agriculture.). They're trying to find a home for all of this fuel that used to be jet fuel. That's a really bullish thing for agriculture" as the new crop season approaches, he said.
"It's a good sign that diesel fuel (prices) will be low. This is good for North Dakota farmers who might be looking to go into those diesel markets to buy fuel, including early for spring. I don't see any reason why we would see the significant disruptions and storage issues that we saw in the spring of 2020," he said.
"There's a glut of oil worldwide, as well," he noted.
RELATED STORY: Low diesel prices help farmers a little, but not a lot
Ripplinger spoke Jan. 5 in a presentation during the annual Roundup Extension farm show in Devils Lakes, N.D. Like most other recent farm shows, Roundup was held online and made available to the news media.
The event was geared primarily to farmers and ranchers in northeastern and north-central North Dakota, but agricultural producers elsewhere could benefit from many of the presentations. This year's lineup included sessions on small grains, row crops, marketing, soil health, economics, livestock, weeds, horticulture, family and community wellness and small farms.
As for jet fuel vs. diesel fuel, "Every given barrel of oil has certain characteristics. They're not uniform," varying with the grade of oil, Ripplinger said. But in general, every barrel of oil can be used to produce certain amounts of gasoline, diesel fuel and jet fuel, as well as other oil-derived products. How refineries are set up to produce the different products also is a factor.
U.S. farmers already have benefited from lower fuel and oil prices. The U.S. Department of Agriculture's Economic Research Service forecasted late last year that ag producers' fuel and oil expenses would decline $1.9 billion, or 14.4%, during the 2020 calendar year.
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January 15, 2021 at 06:40PM
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Jet fuel or diesel fuel? Good news for farmers - AG Week
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