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Propane supply tightens

Rationing results from ‘perfect storm’ for demand

November 18, 2009
By LARRY KERSHNER/Farm News news editor

Farm cooperatives and producers with their own corn-drying systems were alerted Tuesday morning that propane would be rationed as a result of bigger-than-expected requirement for the gas during a delayed and extended harvest season.

Rationing officially went into effect at 6 p.m. Tuesday, said Deb Grooms, executive director of Iowa Propane Gas Association.

Grooms indicated that rationing is necessary due to huge demands for drying down extra-moist corn. With the demand, the allocation system was set in place, Grooms said, to assure that regular Iowa customers at the pipeline terminals would have first priority over out-of-state buyers.

Late-fall cool and wet conditions prevented corn from drying down as it normally would this season.

As a result, those with drying facilities have been running extra long because it takes more time to dry each load of corn for long-term storage.

"It's been a perfect storm for propane," said George Jacques, sales rep for Plains Marketing near Mount Pleasant. "There's just so much you can get through 6- and 8-inch pipes and it takes more BTUs to dry a bushel of corn."

Fact Box

Gov. allows propane haulers stay on the road longer

In order to keep propane moving to Iowa cooperatives, Gov. Chet Culver has lifted the 11-hour restriction of continuous driving on the road. This exception applies only to those hauling propane gas products, the governor said.

"Iowa's farmers are the best in the world." Culver said. "This proclamation will assist corn and soybean growers get these important commodities to market as quickly as possible."

Currently, truck drivers are limited to driving no more than 11 hours in a 14-hour shift and then must have a mandatory 10 hours of rest. Culver's exemption for propane haulers will be effective until Dec. 1.

"This is the latest harvest for corn and soybeans since 1951," said Bill Northey, Iowa Secretary of Agriculture, "so it is vital that farmers are able to get into the fields while the weather allows. There are still several billion dollars worth of corn in the fields and there was some concern by farmers that they may be forced to stop harvest while they waited for the propane they need to dry their crops."

The exemption, the governor added, does not allow for a fatigued driver to be placed on the road, and mandates a 34-hour rest period for any driver that drives more than 70 hours in any eight consecutive day period.

Jacques added that suppliers have been hauling propane from Kansas, Missouri, Oklahoma and as far away as Montana. "Supply is the name of the game right now."

Jacques said LP allocations would continue for at least another week.

"The inventory of LP is fine," said Howard Stearns, general manager of United Co-op in Webster City.

Stearns said limited infrastructure, not a shortage of fuel, prompted the establishment of the allocations. He said there aren't enough storage tanks at terminals in places like Clear Lake, Des Moines and Ogden to keep up with the increased demand for propane created by a wetter corn harvest this year.

The result, he said, has been long lines of tank trucks waiting to fill with LP at the terminals.

He predicted that the allocations will be lifted in about two weeks and supplies will be normal for the winter heating season.

"There's no question there will be enough," said Colt Powers, an LP specialist for AgVantage FS Inc. in Clarion.

Compounding the problem, Jacques said, is the simultaneous need for more anhydrous ammonia for fall field preparations. The same trucks that haul LP also haul NH3. With trucks going long distances to bring the gas into Iowa, it makes it tough to find vehicles to transport the fertilizer.

Clayton Rye, Hanlontown farmer and Farm News correspondent, said rationing LP puts operations like his in a bind. "It's put a crimp on operations around here."

Rye said Wednesday that he was combining corn and had enough LP for drying to get through the day. His supplier indicated its daily allocation was cut to one-third of customers' demand. The supplier, Rye said, committed to try to get more gas to him that day, but could make no promises.

"I don't need a full tank everyday to get through," Rye said. "The dryer doesn't care if the tank is full or a quarter full. I just need enough (LP) to get through eight more days."

Rye mused that within two weeks, the propane market will likely go from a shortage to a glut. "As more corn dryers are turned off, that will make more gas available and suddenly, customers will be saying, 'I don't need anymore.'"

In a weekly newsletter, George Cummins, Iowa State University agronomy field specialist, indicated that another worry has developed for propane suppliers and consumers in that if the weather turns colder before Iowa's corn-drying season ends, LP supplies will become even tighter as households will need the gas for warmth.

Chuck Schafer, general manager for North Iowa Cooperative in Mason City, described the allocation "as a very difficult situation.

"We're working day-to-day to meet the needs of our customers.

"This just hit us," Schafer said Wednesday morning, "and we're still trying to understand it."

(Bill Shea, of the Messenger in Fort Dodge, contributed to this article.)

Contact Larry Kershner at (515) 573-2141, ext. 453, or by e-mail at: kersh@farm-news.com.

 
 

 

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