The drop in diesel prices may not have caught the eye of many motorists, but for farmers and ranchers, it couldn’t come at a better time.
Diesel prices are at the lowest point since 2006 — diesel was at $2.03 a gallon on Friday, 21 cents cheaper than a month ago and 77 cents lower than a year ago, according to the AAA National Fuel Gauge.
Jim Sartwelle, a Texas Farm Bureau economist, said that’s particularly good news because farmers and ranchers are getting less for their commodities, such as corn, soybeans and cattle.
“The general response to lower fuel prices is ‘Thank goodness!’ because we have seen a drop in commodity prices,” Sartwelle said.
For example, beef cattle prices have dropped significantly. A 500-pound steer in December 2014 got $1.70 a pound while it fetched only $1.25 in December 2015, he said.
For corn, futures on the Chicago Mercantile Exchange reached $4.10 a bushel — that was the expectation in October for March prices. But last week the expectation of March prices had dropped to $3.70, a 10 percent drop, he said.
Cash prices for a bushel of feed corn got as high as $7 in the summer of 2008. Now, it’s in the $3 range, Sartwelle said.
Easing the pain, of course, has been the most recent USDA prediction that the agriculture sector will spend $60 billion — or about $1.5 billion — less for cost of production after seeing those prices rise 8 percent annually from 2010 to 2014. Lower fuel prices are part of the reason.
“So it’s good that diesel has come down because commodity prices are down. It’s the best news for farmers’ profit and loss statements in quite a long time,” Sartwelle said.
Texas Supreme Court says no to Chesapeake
Last year, Chesapeake Energy hoped that the Texas Supreme Court would throw it a life preserver and revisit its decision in its lawsuit with the Hyder family of Fort Worth. Chesapeake characterized the ruling in favor of the Hyders as a “sea change in the law.”
Well, on Jan. 29, while the state’s highest court did take the opportunity to tweak its original June opinion — changing a word here and a line there — it denied Chesapeake’s request for a rehearing, bringing the case to an end.
By doing so, the court upheld a 2014 San Antonio appeals court ruling that awarded the Hyder family at least $1 million in royalties, interest and attorney fees.
In its ruling, written by Chief Justice Nathan Hecht, the majority said that the agreement the Hyder family signed with the original production company, a lease that was bought by Chesapeake, specifically barred the company from subtracting production costs from the checks.
David Drez, the Hyders’ attorney, argued that the case involved a specifically negotiated, heavily tailored lease. But Chesapeake stated that the court “disregarded its own precedent” and “inexplicably ignored the law.” Chesapeake’s lawyers said the court was “wrong, and its rushed decision should be corrected.”
Other energy companies anxious about the ruling, such as BP American, Devon Energy and XTO Energy of Fort Worth, backed Chesapeake’s argument.
At the same time, attorneys representing the city of Fort Worth, Tarrant County College and landowners large and small, all suing Chesapeake over royalty payments, wanted the Supreme Court to hold its ground.
Don’t be surprised if the high court’s decision gets mentioned in upcoming cases against the Oklahoma City energy giant.
Goff to be inducted in real estate hall of fame
One is a brilliant investor and real-estate titan, the other a legendary developer with 36 major shopping centers amassing over 11 million square feet to his credit.
John Goff, real estate investor and head of Crescent Real Estate Holdings in Fort Worth, is being inducted into the North Texas Commercial Association of Realtors Hall of Fame.
Developer John P. Weber of Weber Co. in Dallas, who has built several Tarrant County shopping centers, including Montgomery Plaza on West Seventh Street, is also being inducted.
The 28th annual NTCAR Reunion and Hall of Fame event will be May 4 at the Dallas Country Club, 4100 Beverly Drive.
Goff is founder of Goff Capital Inc./Goff Capital Partners and chairman and CEO of Crescent Real Estate Holdings. He co-founded Crescent Real Estate Equities with the late Richard Rainwater. The company grew from about $500 million at its intial public offering to a $6.5 billion company when it was sold to Morgan Stanley in 2007.
In 2009, Goff, through Goff Capital, partnered with Barclays Capital to reacquire Crescent.
“John Goff is a true visionary who has a distinguished career in the real estate and investment arenas,” said Greg Cannon, chairman of the 2016 Commercial Real Estate Hall of Fame dinner. “A brilliant forecaster of trends with a masterful knowledge of financial matters, he is probably best known for his pioneering efforts in partnership with Richard Rainwater to launch the hugely successful Crescent REIT during a down economic period.”
Hall of Fame inductees were first honored in 1988. In 2015, Fort Worth’s Terry Montesi of Trademark Realty was honored.
A fashionable first-class kit
American Airlines unveiled new amenity kits created by fashion designer Cole Haan.
The kits will feature products by 3LAB Skincare, C.O. Bigelow Apothecaries and Clark’s Botanicals and will be distributed on flights starting in March.
“We’re investing billions of dollars to customize and elevate the travel experience for all of our customers, and we know our premium flyers are looking for a refined and modern experience when it comes to airline service, right down to the amenity kits for long flights,” American’s vice president of global marketing, Fernand Fernandez, said in a statement.
The kits will be available to first-class passengers on international and domestic flights and for business class travelers on international flights, American said. They will also include $75 toward a future Cole Haan purchase and discount codes offering 20 percent off the skin-care brands.