Fuel prices and the economics of touring in 2026

[contraguard05]

In real life, I teach economics and government. My kiddos are learning about economic shocks affecting aggregate supply, and one of the things that makes everything more expensive is rising fuel prices(More expensive to travel, more expensive to ship, more expensive to run the machines that make everything, you name it).

Putting my Comparative Government teacher hat on (we study Iran as part of the curriculum), there is the potential that current events will be more than a momentary disruption. 

I'm curious (concerned) to know how bad can it get before a corps decides to pull the plug on the summer or if DCI does it for everyone, a la 2020?

[craiga]

2 hours ago, contraguard05 said:

In real life, I teach economics and government. My kiddos are learning about economic shocks affecting aggregate supply, and one of the things that makes everything more expensive is rising fuel prices(More expensive to travel, more expensive to ship, more expensive to run the machines that make everything, you name it).

Putting my Comparative Government teacher hat on (we study Iran as part of the curriculum), there is the potential that current events will be more than a momentary disruption. 

I'm curious (concerned) to know how bad can it get before a corps decides to pull the plug on the summer or if DCI does it for everyone, a la 2020?

I do not  forsee any corps pulling the plug this summer, or DCI either.  It was only a decade ago that we were well above $4.50 a gallon nationwide (and higher for diesel) and nobody pulled the plug.  The season didn’t happen in 2020 due to health concerns and much of the country was completely shut down. I personally expect this current international crisis to be over well before summer and feel that fuel prices will drop back when it does. Just my opinion.

Edited March 4 by craiga

[denverjohn]

Fuel prices will still be lower than 2021 - 2024.

[Jeff Ream]

1 hour ago, denverjohn said:

Fuel prices will still be lower than 2021 - 2024.

maybe. one never knows. just because the current crisis ends means prices go down

[greg_orangecounty]

The activity survived, even thrived, during an OPEC oil embargo in the 1970’s along with an 11% rate of inflation (CPI) and stagflation.  The cost of fuel is a factor but not “THE” factor in the health of the activity.  No one knows what the future holds but we’ve seen a lot worse.

 

[Slingerland]

3 hours ago, greg_orangecounty said:

The activity survived, even thrived, during an OPEC oil embargo in the 1970’s along with an 11% rate of inflation (CPI) and stagflation.  The cost of fuel is a factor but not “THE” factor in the health of the activity.  No one knows what the future holds but we’ve seen a lot worse.

 

Count the number of community corps in 1972 vs the number in 1980, after two separate energy price spikes, and there's a significant drop off in participating orgs.  Gas prices in 73 and 74 led to inflation (looking for my "Whip Inflation Now" pin...) and a recession that decimated working class households throughout the rust belt and the manufacturing northeast, the two most reliable hotbeds of community corps back in the day. Not really "thriving", to be sure.

Most corps have factored in unstable food and fuel pricing into their budgets, so it's unlikely to have that much of an effect, but the fatigue from Boards and funders certainly won't be helped by another summer where folks hope they can cover their expenses.

Edited March 5 by Slingerland

[2000Cadet]

5 hours ago, greg_orangecounty said:

The activity survived, even thrived, during an OPEC oil embargo in the 1970’s along with an 11% rate of inflation (CPI) and stagflation.  The cost of fuel is a factor but not “THE” factor in the health of the activity.  No one knows what the future holds but we’ve seen a lot worse.

 

Maybe. But fuel isn't the only thing in which prices have risen. Food prices have gone up as well so that also may factor into the budgets of corps now. 

[vaguardguy]

Gas prices tend to track closely to inflation. If anything, gas is, in relative terms, cheaper today than it was in the activity’s heyday in the 1970s-early 1980s.

 

 

This is in sharp contrast to drum corps tuition which has significantly outpaced inflation.

 

A lot of corps have used rising fuel prices as a rationale when disclosing financial strain. This makes sense because it is one of their single largest expenses. With that said, if a corps can estimate for inflation, they can budget for fuel.

 

Seems to me the biggest drivers in the increase in corps tuition when adjusted for inflation are, in no particular order: 1.) insurance, 2.) housing (especially spring training), and 3.) staff. Students, and especially their parent stakeholders, simply expect and demand a higher-quality experience than we did decades ago, and that comes at a cost.

[Jeff Ream]

20 hours ago, greg_orangecounty said:

The activity survived, even thrived, during an OPEC oil embargo in the 1970’s along with an 11% rate of inflation (CPI) and stagflation.  The cost of fuel is a factor but not “THE” factor in the health of the activity.  No one knows what the future holds but we’ve seen a lot worse.

 

given the amount of corps that folded in the 70's, i'd disagree. while fuel costs were not the only reason this happened, it had to have played a part

[Sh0uldN0t]

I seem to recall that one corps (maybe one from the Midwest?) purchased a fuel-price hedging contract for one summer. The idea was the contract would protect the corps against an anticipated rise in gas prices. Except prices didn't rise as expected. And so that corps had an expense that delivered no benefit. In essence, its fuel costs rose even though gas prices didn't. You just never know. 

There's an alternate scenario here. In that one, capitulation in Tehran takes threats off the board and makes the oil business more efficient, driving down prices. Let's hope.