We have known about the propane frustrations farmers have been having this fall. A wet fall compounded on a wet spring and a late plant has farmers drying the harvests from levels they never have before. Farmers were trying to leave crops in the field as long as possible to avoid drying. However, Mother Nature and has made drying conditions all but nonexistent, and father time keeps flipping the calendar.
Elevators are trying to keep up with demand. These cooperatives base their orders on the pre-booking of producers, but nobody could have anticipated the demand we would have. Elevators and even distributors don?t have the endless storage capacity to hold propane indefinitely, and the demand is not just being affected by grain dryers. The same cold and wet weather which has forced farmers to rely on their dryers, has also forced residents to turn on their furnaces sooner than planned.
The government has tried to do what it can to alleviate the situation. Iowa Governor Kim Reynolds suspended trucking rules of service to allow propane haulers more time to get the fuel moved throughout the state, if they aren?t putting themselves or other drivers in danger.
On the Federal level, Iowa Senators Grassley and Ernst are calling on the Federal Energy Regulatory Commission (FERC) to prioritize propane shipments to Iowa. There is not a lot which the government can do, because this happens to be a matter of product distribution in the private commercial sector. A copy of a letter the Senators sent to FERC Chairman Neil Chatterjee can be found here.
During the National Association of Farm Broadcasting convention in Kansas City, I had the chance to talk with Mike Newland of the Propane Education & Research Council. Newland says, ?Unfortunately, we knew it was coming.?
Newland says we have enough propane. There isn?t a shortage, per se. The problem is the logistics of the distribution network cannot keep up with demand. However, Newland says he feels we have seen the apex of the situation, and we can begin to see light at the end of the tunnel.
Now, you may hear what Newland said and think to yourself, ?Hey! If we knew this was coming, why didn?t they do a better job of preparation?? Newland says the propane industry did all it could to get the message out to farmers to fill early and reevaluate your needs and potential needs with your suppliers. It also comes back to unprecedented levels of demand and finite levels of storage inside the state.
Newland highlights what is being done to keep up with this demand. States have suspended hours of service regulations, extra fleet trucks have been added to increase movement capacity, and some states are trying to broker deals with the pipelines.
Newland echoed the sentiments of the entire agriculture industry when he said, ?2019 is going to be a year we all remember. It won?t be for good reasons. It will be for the unprecedented challenges we faced, and the hard lessons we have had to learn.
