This year was a tough one for the propane industry and a lot of people in the midwest were left without…or paying a premium for propane. Here in the northwest we really didn’t see the extremes due to a milder winter. Matt Kumm, CHS propane marketing manager talks about how the crisis came about.
KUMM: If you take a look at this last year, we really had the perfect type of storm develop in May, a year ago. We still had snow hitting parts of the U.S. so we had an extended winter. And the significance of that is normally during the April to September time frame is when we build inventories for the following year. So that was cut a little short. Then you go into harvest in the corn belt are and harvest happened all at once across the corn belt and the corn came off pretty wet.
Propane powered dryers were being used extensively and then the temperatures began falling so people were using more propane to heat with and it created a greater demand than the supply. He says there are some things people can do to help.
KUMM: Control the controllables. Working with the distributor to evaluate your storage. Filling tanks in the summer to make sure that you avoid those potential price spikes that can occur during the demand season. And then contracting for the demand season.
That’s today’s Line On Agriculture. I’m Greg Martin on the Ag Information Network.