Farmers and agribusinesses are being urged to start evaluating how much propane they’ll need to meet grain drying and other needs this fall, such as home heating and livestock facility use. The derecho that swept through Iowa on Aug. 10 created many unknowns for this year’s harvest. Propane users should anticipate, and suppliers should make plans to accommodate, increased propane demand.

“After an ideal planting season and a warm, dry summer, we anticipated normal crop drydown this fall, but the drought and derecho had significant impacts on our cornfields,” says Iowa Secretary of Ag Mike Naig. “I encourage farmers to take a look at their grain drying and home and livestock heating needs, and formulate a plan with their propane suppliers to make sure their needs are covered and their tanks are full.”

The derecho’s sustained, high winds damaged an estimated 3.6 million acres of corn in 36 counties, just a few weeks before the harvest. While the degree of damage varies by field, millions of acres of cornstalks were snapped, flattened or tangled. This will reduce the amount of airflow around the crop, and farmers should anticipate harvested corn will have higher-than-normal moisture levels. Farmers should start engaging in planning conversations with their local propane suppliers, take advantage of early buying and booking programs, and top off their tanks now before harvest begins.

Planning resources for farmers

High-moisture corn must be dried before the grain can be stored in the bin to prevent grain quality issues. The Iowa State University Extension Grain Drying Economics Module helps farmers work through corn drying and marketing decisions.

The Propane Education and Research Council has created a grain dryer propane-use calculator to help crop farmers determine how much propane they may need this fall. Enter the number of crop acres, the average anticipated yield per acre, and how much moisture may need to be removed from the crop to estimate how many gallons of propane may be needed.

The Iowa State University Extension Grain Quality Initiative also has resources to help agricultural decision-makers work through grain drying, storage and quality considerations.

Planning resources for suppliers 

The National Propane Gas Association has developed the ABCs of Supply Preparation checklist. This tool guides propane suppliers through demand, supply, logistics, storage and customer considerations to help decision-makers plan their fall inventories.

Suppliers can track Iowa propane demands, inventory levels and prices on the Iowa Propane Trends and Statistics website. This is a public resource that was launched in January by the Iowa Department of Agriculture and Iowa Department of Transportation to increase the visibility of key metrics that impact the propane supply chain in Iowa.

As of Aug. 26, U.S. propane stocks were at 90.8 million barrels, or 86 days of supply. The U.S. propane inventory is expected to build over the next few weeks to peak around 91 million barrels. Midwest propane supplies stand at 25.26 million barrels, down from 26.12 million barrels at this time last year, but supplies have been steadily increasing since July 10.

Iowa propane stakeholders 

Last fall, Iowa experienced some propane supply challenges because grain drying demands caused by the late planting season coincided with an early cold snap that increased livestock and home heating needs.

Naig and the Iowa Department of Agriculture convened a group of propane stakeholders prevent future propane supply chain issues. Members of the group included representatives of the Iowa governor’s office, members of the Iowa Legislature, Iowa Propane Gas Association, propane suppliers and several ag groups.

If farmers or agribusinesses experience propane shortages, they should notify Paul Ovrom at the Iowa Department of Agriculture at 515-242-6239 or [email protected]. Also, notify Deb Grooms at the Iowa Propane Gas Association at 515-564-1260 or [email protected]. 

Keeping up with increased demand 

Retailers and state officials say an earlier harvest this fall and an increase in fuel storage should avoid a repeat of last year’s propane crunch. Last fall, farmers in areas of Iowa and the Midwest couldn’t get enough propane to dry their corn when needed. Three factors coincided that led to severe constraints on propane delivery to many users, says Paul Ovrom, who keeps tabs on the state’s propane supply for the Iowa Department of Agriculture. 

First, Midwest corn harvesting was two to three weeks later than normal due to a wet, cold spring that delayed planting. Second, the capacity limitations of pipelines that deliver propane to Iowa became evident in mid-to-late October 2019, and many propane suppliers were unable to access adequate supplies at pipeline distribution facilities to meet customer demand. Third, intermittent wet, cold weather in the Midwest, beginning in late October, also meant increased demand for propane for livestock facilities and home heating. 

“Last fall’s cold, wet weather also amplified the need for more propane for drying grain to adequately reduce moisture content in corn harvested for long-term storage,” Ovrom says.  

In 2019, multiple states began harvesting at the same time, which caused a rush in propane demand across the Midwest. “As huge volumes of propane were being used to dry the harvested grain, we had an early cold snap that resulted in earlier-than-usual demand from residential customers,” notes Deb Grooms, CEO of the Iowa Propane Gas Association.  

Many of the main pipelines that bring propane to terminals in the Midwest were constructed in the 1960s. Ongoing increases in demand for propane by farmers, homeowners and industrial users over the years continue to put pressure on aging pipeline systems to deliver an adequate supply when needed. However, adding more storage capacity both on farms and at retail locations will help provide the gas for farmers at times when they need it. 

Along with added storage capacity, sourcing propane from different routes of supply, such as railroad tank cars, is another way to help propane retailers meet the needs of their customers. “Although adding storage facilities and diversifying sources of supply can bring additional costs to the price per gallon of propane,” Grooms says, “this will help meet demand during peak periods of use.”