Propane Demand Could Increase with Large Forecasted Corn Crop
Download Propane Demand Could Increase with Large Forecasted Corn Crop
Washington, D.C. (July 13, 2007) – The growing ethanol boom has resulted in the largest anticipated U.S. corn crop in more than 60 years. This large crop and increased prices hold great potential for farmers and the rural economy. It could also benefit the propane industry.
Since approximately eight out of ten row crop producers use propane to dry their grain, the propane industry could see an above average demand for propane as the harvest begins this fall. The U.S. Department of Agriculture’s National Agricultural Statistics Service (NASS) reports U.S. farmers planted almost 93 million acres of corn in 2007, a 19 percent increase over 2006.
”According to NASS, Midwestern states such as Illinois, Iowa, Minnesota, and Indiana have planted record amounts of corn,” said PERC Director of Agriculture Programs Mark Leitman. “Those states are also leading users of propane for grain drying. This is a great opportunity for the propane industry to fulfill the needs of the local farmer and increase sales this fall.”
The amount of propane used to dry harvested grain depends on the type of grain drying equipment. Farmers can choose from stand-alone dryers, or fans and heaters that are attached to storage bins. The average amount of propane needed to dry a bushel of corn depends on the initial moisture percentage of the corn, as well as the temperature inside and outside the grain drying equipment. However, on average, a gallon of propane will dry approximately 11 bushels of corn from 24 percent moisture to 18 percent moisture, according to Jeff Wittek of CHS Inc. (Inver Grove Heights, MN).
Propane retailers can prepare for the potential increased demand by communicating with grain-producing customers today. Nurturing a positive relationship between propane dealers and agriculture customers promotes a better understanding of each other’s needs. To assist farmers in estimating potential propane demand, PERC has developed an agriculture cost estimator tool available at www.agpropane.com. The tool is also available in hard copy format and can be ordered by calling the Propane Industry Resource Catalog at (866) 905-1075.
“By working on the supply and demand elements in the distribution channel, propane retailers can reduce the headaches and costs associated with demand peaks resulting from corn drying,” said Agriculture Advisory Committee member Kevin Williams, CHS Inc. (Inver Grove Heights, MN). “Retailers can prepare by watching price trends in the corn market and packaging their fixed price solutions on a per bushel basis, and by establishing a connection to a wholesale supplier who has the resources to deliver additional supply and service during peak periods.”
The propane industry may also be interested to know about PERC’s work with TEMP-AIR to research pest control in grain storage bins. The research project will test the efficacy of a mobile heating unit in eliminating insects and mold from bins prior to grain storage to prevent damage to the crop.
“PERC continues to research new areas in which propane can be used to benefit the agriculture and propane industries,” says Leitman. “Through continued research of innovative new technologies, PERC is able to provide farmers with new propane-fueled applications and propane retailers with the opportunity to increase sales.”
PERC’s vision in agriculture is that, by 2010, the agricultural industry will recognize propane as a preferred energy source offering exceptional value. This value is achieved through a unique combination of product benefits, including cost-effectiveness, efficiency and productivity, reliability, portability, and environmental friendliness.
For more information on PERC and its programs to promote the safe and efficient use of propane in agriculture, call (202) 452-8975 or visit www.agpropane.com.