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For farmers and ranchers who rely on propane to dry grain and heat their ag buildings and homes, proper planning is a must. Tyler Kelly, a propane commodity trading expert with CHS, provides contracting tips and a supply-and-demand outlook.
Kelly recommends propane users talk to their energy suppliers about future needs well before the grain drying and heating season begins. He encourages them to evaluate all propane supply and retail programs available to find the one that best fits their situation.
“Being proactive is critical to coming up with a plan,” Kelly says. “Don’t wait until the snow starts to fly or the first cold snap when you really need propane. You can save time and headache down the road.”
Supply and demand
In late July, propane supplies nationwide were above historically average levels, Kelly reports. The two primary reasons for ample supplies were last year’s mild winter, which reduced demand, and propane production being near all-time highs.
However, Kelly says propane exports are keeping pace with production. “Surety of supply doesn’t depend on overall U.S. propane inventory levels. What really matters is whether there will be sufficient supplies where you need it and when you need it.”
Plan ahead
Kelly recommends farmers and ranchers contact their energy supplier as soon as possible to fill propane tanks and contract needed gallons for the rest of the season.
Each year unplanned events, such as hurricanes, can affect the supply chain. Planning ahead is a great way to avoid impacts of the unexpected, he says.
Estimate propane use and storage
Propane suppliers can analyze past annual consumption to provide contracting recommendations for future needs, Kelly says. Also, consider changes to your farm or residence that require propane, such as upgrading grain drying capacity, when making purchasing decisions.
