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Propane availability strong to start winter season

Barn-with-LP-tanks

Despite high fuel costs and concerns about fertilizer for 2023, propane isn’t likely to be a issue for rural residents this winter.

Steve Kaminski, president of the National Propane Gas Association, said multiple factors are leading to optimism for the upcoming months.

Drier conditions in many areas have led to less propane needed for drying this year’s crop, helping offset any limitations or price increases for the winter.

“This year is shaping up to be, fingers crossed, a much less problematic year,” Kaminski said in an interview with AgriPulse

Any drags on propane availability would come from a severe cold snap, Kaminski said, and even then it would be more of a short-term logistics issue.

“The more storage onsite at homes and at farms, the less propane has to be moved in January when weather can be an issue.”

While availability doesn’t seem to be as much of a concern, prices are still sitting at a higher level than previous years.

Current forecasts for the 2022-23 winter are showing much of Iowa, Illinois and Missouri as expecting higher-than-normal temperatures for the months of December, January and February.

“The above-normal risks are really front-loaded in December,” said Jon Miller with Flashpoint Energy Partners during a PERC webinar. “It feels like December is more of an extension of fall at this point.”

The late consistently cold weather would drag on supply.

According to the U.S. Energy Information Administration, residential propane sits at $1.93 per gallon in Iowa, $2.07 in Illinois and $2.31 in Missouri.

Those prices have largely remained steady for the month of October.

While some areas may not need much propane to dry their crop, others are still dealing with weather delays. Portions of the Midwest have been hit with some late October rainfall, with more falling in early November.

Those acres will likely need added drying, which would increase any propane needed.

“The upper Midwest and upper plans are above average in moisture,” said Michael Newland, director of agriculture business development at PERC. “That could drive up propane use.”

While prices may be higher, he reminded producers to have a plan when it comes to propane because it can be devastating on a home to run out.

Miller said prices appear set to be lower this winter compared to last year’s levels.

“Last year there was fear of the unknown which led to volatility,” he said.

“We’ve seen a divergence from last year’s fear-based pricing. There have been times this year where we had inventories lower than a year ago, but we have less fear so prices have been lower.”

The ongoing war in Ukraine and Europe’s dependency on Russian natural gas is likely to play a factor in prices depending on news throughout the winter.

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