What have energy prices looked like so far this year?

Energy prices significantly impact agriculture and farm profit. From running machinery to the milking parlour and producing fertiliser, energy prices affect many costs on farms.

The recent Teagasc Situation and Outlook Report gave a run down on energy markets and how they have changed in recent months.

Crude oil

Crude oil price took a dramatic drop in 2020 due to reduced demand as a result of the Covid-19 pandemic. Energy use from the transport sectors declined and a large reduction in use came from the aviation sector.

In December 2019, the monthly Brent crude oil price per barrel was US$65. In February and March of 2020, that price had dropped to just over $20 per barrel. The report stated that as prices recover they are moving to €40 per barrel. This can be seen in the graph below.

Natural gas

Natural gas prices also declined dramatically in Europe as can be seen in the graph below.

Motor fuel and electricity

Motor fuel and electricity price dropped amidst the pandemic as well. Since the beginning of 2020, motor fuel prices have dropped by 20%.

Demand for maize

The reduction in vehicles on the road also impacted the US maize crop, much of which is used in the production of ethanol. With reduced demand and ample supply the price of corn dropped dramatically and is unlikely to reach any heights this season.

This is not good for grain prices as other grains will have to compete with competitively priced corn.