Talking propaneRoy Willis can’t promise the propane shortage of 2013 to ’14 won’t happen again. But he can suggest ways for farmers to reduce their risk.
By: Jonathan Knutson, Agweek
Roy Willis can’t promise the propane shortage of 2013 to ’14 won’t happen again. But he can suggest ways for farmers to reduce their risk.
“The most important thing is to have a good relationship with the propane supplier in your local market and to work with them to predict your needs and come up with a good economic plan that works for both you and the retailer,” Willis says.
Willis is president and CEO of the Washington, D.C.-based Propane Education & Research Council, a check-off program funded by the propane industry. He talked with Agweek about propane and agriculture: ag accounts for about 10 percent of retail propane gallons sold in the U.S.
Preliminary numbers show that 4½ to 5 times more propane than usual was used to dry grain last fall and winter, he says.
The combination of heavy crop-drying demand and the exceptionally cold winter “is unusual. I look at this as somewhat of an anomaly. But it’s a cautionary tale that says we have to do a better job of planning, both as retailers and as end-users, to make sure we have the supplies we need when we need them,” he says.
He offered these suggestions for farmers who use propane:
• Investigate investing in more efficient payback for equipment such as grain dryers that use propane. “The payback varies, but the payback period is reasonable generally.”
• Consider building or adding storage. Propane is usually cheaper in the summer, and producers who buy and store it “are likely to improve the economics, as well as the supply picture.”
• Build a relationship with a local propane supplier. “Propane is one of the few commodities that’s still delivered to the house. Having that relationship with a propane supplier can be critically important.”
Propane’s future is bright, Willis says.
U.S. propane production has increased five straight years and is projected to increase through 2030. Today, about 19 billion gallons are produced annually, up from about 15 billion five years ago. About half of current production goes into the retail market, with the rest exported or used to produce petrochemicals, he says.
“Our primary challenge will be to work with customers and end-users to understand what went on this year and to work with them to make certain these kinds of disruptions don’t occur again,” he says.
To learn more about propane and agriculture visit, www.agpropane.com. The site, operated by the Propane Education & Research Council, includes information on programs and incentives that can help farmers save money on propane equipment.