Iowa farmers, rural residents and others who use propane should consider taking steps to ensure adequate supply this fall and winter. Getting your grain storage space lined up is also something to start thinking about and working on. Some grain industry market analysts are projecting, with a big crop currently in the making, the U.S. could be short by over 800 million bushels in terms of adequate grain storage space this fall.
"Last fall and winter the price of propane jumped sharply to more than $5 per gallon in some locations as a number of events severely tested the capacity of the current propane delivery system and infrastructure," reminds Bill Northey, Iowa Secretary of Agriculture. "Such a dramatic price increase seems unlikely this year, but it is important for propane users to be prepared." The Iowa Department of Agriculture several days ago issued a press release offering the following suggestions.
Consider taking steps to ensure an adequate supply
Actions that farmers and other propane users can take now in order to prepare for this fall and winter include:
* Making sure propane supplies for grain drying, livestock facilities, homes and machine sheds are full going into the fall season.
* Take advantage of early buy/booking programs.
* Consider expanding on-site capacity at facilities and homes.
* Communicate early and regularly with propane suppliers.
Crop projections continue to suggest a record corn and soybean harvest in Iowa and the nation. With a large crop in Iowa and neighboring states, the demand for propane use for grain drying could be significant again this year. Fortunately, crop maturity is significantly ahead of last year and slightly ahead of the five-year average, which could limit some of the need for propane.
Transportation changes also could impact supplies
In addition, there are some significant changes within the energy sector, and specifically affecting propane, that will continue to impact supplies in Iowa:
* On July 1, 2014, Kinder Morgan Partners MLP, reversed the Cochin Pipeline that once delivered Canadian propane to Iowa. This pipeline provided approximately 13% of Iowa's annual use and 38% of Minnesota's annual use.
* While the USA is now producing record amounts of natural gas liquids, or NGL's, energy companies are also exporting record amounts of propane from the Gulf of Mexico region.
* Increased rail movement of propane is challenging due to limited capacity and already high demand from other sectors.
Northey has also reached out to a number of Iowa ag organizations and the Iowa Propane Gas Association to encourage them to work with their members and partners to continue to prepare to meet propane demands this fall and winter.