Time seems to fly by faster the older I get, and it certainly isn’t as ample as it once was. Perhaps as a grower you feel the same way, always on the go with industry events, last-minute orders and greenhouse emergencies that require your presence.
Because you’re always on the go, industry trends may slip by the wayside. Sustainability? Alternative energy? The industry can change so rapidly you may still be trying to adapt to trends other growers adapted to years ago. Still, it’s never too late to explore those trends and determine whether they make sense for your greenhouse operation.
Energy efficiency is one avenue you’ll want to explore if you haven’t done so already. Several growers have embraced alternative energy sources like corn, wood and fuel pellets, but those alternatives aren’t for everyone. The majority in the grower crowd are using natural gas and oil to heat their greenhouses, and they too are finding ways to use those sources more efficiently âˆ’ be it through investments in more efficient heating systems and unit heaters or a facility redesign that delivers heat to product more efficiently.
Although growers generally refer to energy efficiency as using less energy to receive the same level of service, it’s equally important growers are efficient with the money they spend on natural gas and oil.
Answer this question, growers: Why shouldn’t you want to buy natural gas when its cost per dekatherm is at its very lowest? According to Kube-Pak President Bill Swanekamp, who offered energy input management advice at OFA Short Course earlier this year, growers simply will never know when natural gas is at its cheapest.
The reality, Swanekamp says, is natural gas and oil are commodities. They can be bought and sold by stockbrokers and don’t necessarily have to be used. Just a few years ago, Wall Street took control of half of energy commodities. Brokers bid against each other, and the prices of energy inputs rose dramatically.
Growers have no control over rising and falling prices, but they can fix a price, pay it and get some satisfaction knowing they purchased those energy commodities within the means of their operating budget. “It’s better to say you can pay so much for X many dekatherms and then buy it with no regrets,” Swanekamp says. “Don’t be greedy, be reasonable. Fix a price you can afford as a business.”
Kube-Pak purchases most of its natural gas at fixed prices, and Swanekamp typically prefers to lock a price in for one year at a time. For Kube-Pak, there are more advantages operating at a locked price. Swanekamp has also learned from other payment approaches that turned disastrous, and you can learn from one of his greatest energy misfortunes, too.
“I was in Key West (Fla.) on vacation when the Gulf War in Kuwait started,” he says. “Immediately, I went into my room and tried to purchase a contract for natural gas. I couldn’t get the contract, and the price of natural gas sky-rocketed over the next couple days. It cost me $25,000.”
This winter, it’s unlikely natural gas and oil will be priced at some of the unmanageable rates as the ones in recent years. But that’s not to say next winter or the following one will be as manageable financially as the upcoming winter. Commodities are cyclical, and sound financial preparation is the solution when prices rise again.