Advertise in Print | Subscriptions
Published November 04, 2013, 10:15 AM

Farmers grapple with propane shortage

A lack of contracting cut supplies for farmers

By: Mikkel Pates, Agweek

FARGO, N.D. — A limited supply of propane for drying corn and other crops is slowing harvest for many farmers in central and eastern North Dakota, but they are getting the propane they had already ordered.

Doug Goehring, North Dakota’s agriculture commissioner, says the problem is a result of the unpredictable rate of propane use in agriculture from year to year. And many farmers didn’t forward-contract their needs this year.

The shortage is expected to delay harvest even further in a wet year and cause an “awful bind” in east-central and central North Dakota, Goehring says.

He says that besides being out of position on propane supplies, it likely will cost farmers 20 to 30 cents more per gallon for transportation to get the propane to their farms.

Emily Mir Thompson is a Houston-based spokesperson for Kinder Morgan, the company that owns the Cochin pipeline, which has a major hub in Carrington, N.D. She likened the pipeline to a toll road and says it has delivered all of the supply that the shippers ordered, based on contract amounts from farmers.

Propane shippers — the companies who actually own the product — did not send more propane this year to supply farmers who did not forward-contract their supply.

More propane has been coming during the month of October, but that won’t necessarily help some farmers.

“Shippers tell us how much product they want to move each month,” Thompson says. “What happened back in September — we didn’t receive sufficient ‘nominations’ of how much product the shippers wanted to move. They were running at less than the maximum rate.”

North Dakota Gov. Jack Dalrymple has contacted Kinder Morgan and CHS Inc. to strongly encourage them to mobilize all available supplies of propane to the state’s farmers.

Kinder Morgan says it is bringing in truckers from around the country to tackle the shortage.

Dalrymple, as well as governors from South Dakota, Minnesota and Montana, have signed executive orders extending operating hours for propane truckers.

Pipeline not yet reversed

Thompson says any shortfall in supply is unrelated to a plan by the pipeline to become unavailable for propane in July 2014.

The pipeline has announced plans to reverse its flow, putting a petroleum product called “light condensate” into the line and sending it to Canada where it will be used to dilute and transport products out of the oil sands. Thompson says the propane market will need to adjust and find its products from a different source.

Mark Becker, energy manager for Dakota Plains Cooperative of Valley City, N.D., blamed the shortfall on little product coming from the Cochin Pipeline.

“When the Carrington terminal was at full capacity it would supply 125 to 150 loads a day,” he says. “When you take that out of the system, there’s no way we can keep up.”

The problem seemed to crop up just more than a week ago, just as soon as the dryer season started. Becker says the propane shortage this year will be “way worse” than the last propane shortage in 2009.

“For our co-op here, I need 15 semi-loads to keep up, and I’m getting five at the top,” he says. “I don’t see it getting any better through the harvest. There just isn’t enough supply.”

Slowing corn harvest

Mike Prochnow, who farms with his family near Hankinson, N.D., says he started the year with an 8,000-gallon tank filled, but now says he has his corn harvest on hold until he gets more.

“We had 20 percent of the crop out and that’s all the gas we had so we had to quit,” he says.

On Oct. 25, the corn was coming out at 23 to 25 percent moisture “I think it was lower in moisture before we got this recent rain — maybe 2 to 3 percentage points,” he says.

Prochnow says he contracted propane in advance two years ago.

He says some farmers last year had contracted propane and then were charged a restocking fee when they didn’t take all of the propane they’d contracted.

Prochnow says his choices are to leave the corn standing in the field and wait for the ground to freeze, or take it in the spring. “With any luck it’ll get down to 20 percent (moisture) where you could keep it in an air bin until it dries, or move it quicker into a plant.” He says the ethanol plant in Hankinson, N.D., is taking corn up to 20 percent moisture and the Cargill wet mill that makes high-fructose corn sweetener is taking it up to 25 percent moisture.

He says drought conditions later in the summer and heavy winds have left some corn lying down. “Waiting until spring is not an option for that corn,” he says. “We’ve gotten ourselves into quite a fix here.”

Goehring says that in the western counties, many farmers don’t have on-farm dryers in the first place because they rarely need them. With crops pushed to the ground, they’re likely to be easy pickings for pheasants and other wildlife.

Tags: