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Propane supply tightens

By Staff | Nov 18, 2009

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.”

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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